I 

111TH CONGRESS 

2D SESSION H. R. 4743 

To amend the Internal Revenue Code of 1986 to provide tax benefits to 

individuals who have been wrongfully incarcerated. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 3, 2010 

Mr. LARSON of Connecticut (for himself, Mr. SAM JOHNSON of Texas, Mr. 

BISHOP of Georgia, and Ms. EDDIE BERNICE JOHNSON of Texas) introduced the following bill; which was referred to the Committee on Ways 

and Means 

A BILL 

To amend the Internal Revenue Code of 1986 to provide 

tax benefits to individuals who have been wrongfully incarcerated. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Wrongful Convictions 

5 Tax Relief Act of 2010’’. 


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1 SEC. 2. EXCLUSION FOR WRONGFULLY INCARCERATED IN2 DIVIDUALS. 

3 (a) IN GENERAL.—Part III of subchapter B of chap4 ter 1 of the Internal Revenue Code of 1986 is amended 

5 by inserting after section 139C the following new section: 

6 ‘‘SEC. 139D. CERTAIN AMOUNTS RECEIVED BY WRONG7 FULLY INCARCERATED INDIVIDUALS. 

8 ‘‘(a) EXCLUSION FROM GROSS INCOME.—Gross in9 come shall not include— 

10 ‘‘(1) in the case of any wrongfully incarcerated 

11 individual, any civil damages, restitution, or other 

12 monetary award (including compensatory or statu13 tory damages and restitution imposed in a criminal 

14 matter) relating to the incarceration of such indi15 vidual for the covered offense for which such indi16 vidual was convicted, and 

17 ‘‘(2) in the case of a qualified wrongfully incar18 cerated individual, the first $50,000 of income re19 ceived by such individual in any taxable year begin20 ning after December 31, 2009. 

21 ‘‘(b) LIMITATION RELATING TO INCOME EXCLU22 SION.— 

23 ‘‘(1) IN GENERAL.—The exclusion under sub24 section (a)(2) shall not apply to any qualified wrong25 fully incarcerated individual for any taxable year 


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1 other than a taxable year in the qualified benefit pe2 riod with respect to such individual. 

3 ‘‘(2) QUALIFIED BENEFIT PERIOD.—For pur4 poses of paragraph (1), the term ‘qualified benefit 

5 period’ means, with respect to any qualified wrong6 fully incarcerated individual, the first 15 taxable 

7 years ending after the first date on which such indi8 vidual is a wrongfully incarcerated individual. 

9 ‘‘(3) LIMITATION BASED ON YEARS OF INCAR10 CERATION.—In the case of a qualified wrongfully in11 carcerated individual who served a sentence of im12 prisonment of less than 15 years for the covered of13 fense with respect to which such individual is a 

14 qualified wrongfully incarcerated individual, the 

15 number of full years that such individual was so im16 prisoned shall be substituted for ‘15’ in paragraph 

17 (2). 

18 ‘‘(4) TERMINATION OF EXCLUSION UPON CON19 VICTION OF SUBSEQUENT OFFENSE.—If a qualified 

20 wrongfully incarcerated individual is convicted of a 

21 criminal offense under Federal or State law that is 

22 punishable by more than 1 year imprisonment at 

23 any time during the qualified benefit period, sub24 section (a)(2) shall not apply to the taxable year 


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1 which includes the date of such conviction and all 

2 subsequent taxable years. 

3 ‘‘(c) WRONGFULLY INCARCERATED INDIVIDUAL.— 

4 For purposes of this section— 

5 ‘‘(1) IN GENERAL.—The term ‘wrongfully incar6 cerated individual’ means an individual— 

7 ‘‘(A) who was convicted of a covered of8 fense, 

9 ‘‘(B) who served all or part of a sentence 

10 of imprisonment relating to that covered of11 fense, and 

12 ‘‘(C)(i) who was pardoned, granted clem13 ency, or granted amnesty for that covered of14 fense because that individual was innocent of 

15 that covered offense, or 

16 ‘‘(ii)(I) for whom the judgment of convic17 tion for that covered offense was reversed or va18 cated, and 

19 ‘‘(II) for whom the indictment, informa20 tion, or other accusatory instrument for that 

21 covered offense was dismissed or who was found 

22 not guilty at a new trial after the judgment of 

23 conviction for that covered offense was reversed 

24 or vacated. 


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1 ‘‘(2) COVERED OFFENSE.—The term ‘covered 

2 offense’ means any criminal offense under Federal 

3 or State law, and includes any criminal offense aris4 ing from the same course of conduct as that crimi5 nal offense. 

6 ‘‘(d) QUALIFIED WRONGFULLY INCARCERATED INDI7 VIDUAL.—For purposes of this section, the term ‘qualified 

8 wrongfully incarcerated individual’ means a wrongfully in9 carcerated individual who, except for the covered offense 

10 described in subsection (c)(1)(A), has never been convicted 

11 of a criminal offense (other than a juvenile offense) under 

12 Federal or State law that is punishable by more than 1 

13 year imprisonment. 

14 ‘‘(e) REPORTING REQUIREMENTS.—For purposes of 

15 this section and section 36B, the Secretary shall impose 

16 such reporting requirements as the Secretary determines 

17 necessary or appropriate to carry out this section, includ18 ing a requirement that the individual include with the re19 turn of tax for the taxable year a statement or attestation 

20 that the individual has not been subsequently convicted 

21 of a crime within the meaning of subsection (b)(4).’’. 

22 (b) CONFORMING AMENDMENT.—The table of sec23 tions for part III of subchapter B of chapter 1 of the In24 ternal Revenue Code of 1986 is amended by inserting 


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1 after the item relating to section 139B the following new 

2 item: 

‘‘Sec. 139D. Certain amounts received by wrongfully incarcerated individuals.’’. 

3 (c) EFFECTIVE DATE.—The amendments made by 

4 this section shall apply to taxable years beginning before, 

5 on, or after the date of the enactment of this Act. 

6 SEC. 3. REFUNDABLE CREDIT FOR EMPLOYMENT TAXES 

7 PAID BY WRONGFULLY INCARCERATED INDI8 VIDUALS. 

9 (a) ALLOWANCE OF REFUNDABLE CREDIT.—Sub10 part C of part IV of subchapter A of chapter 1 of the 

11 Internal Revenue Code of 1986 (relating to refundable 

12 credits) is amended by inserting after section 36A the fol13 lowing new section: 

14 ‘‘SEC. 36B. EMPLOYMENT TAXES OF WRONGFULLY INCAR15 CERATED INDIVIDUALS. 

16 ‘‘(a) IN GENERAL.—In the case of a qualified wrong17 fully incarcerated individual, there shall be allowed as a 

18 credit against the tax imposed by this subtitle for the tax19 able year an amount equal to the sum of— 

20 ‘‘(1) 50 percent of the taxes imposed on the 

21 self-employment income of such individual under 

22 subsections (a) and (b) of section 1401 during the 

23 taxable year, plus 

24 ‘‘(2) the taxes imposed on the wages received by 

25 such individual with respect to employment under 


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1 subsections (a) and (b) of section 3101 during the 

2 taxable year. 

3 ‘‘(b) LIMITATIONS.— 

4 ‘‘(1) DOLLAR LIMITATION.—The total amount 

5 of wages and self-employment income taken into ac6 count under subsection (a) with respect to any indi7 vidual for any taxable year shall not exceed $50,000. 

8 ‘‘(2) TAXABLE YEAR LIMITATION.—The credit 

9 under subsection (a) shall not be allowed to any 

10 qualified wrongfully incarcerated individual for any 

11 taxable year other than a taxable year in the quali12 fied benefit period determined with respect to such 

13 individual under paragraphs (2) and (3) of section 

14 139D(b). 

15 ‘‘(3) TERMINATION OF CREDIT UPON CONVIC16 TION OF SUBSEQUENT OFFENSE.—If a qualified 

17 wrongfully incarcerated individual is convicted of a 

18 criminal offense under Federal or State law that is 

19 punishable by more than 1 year imprisonment at 

20 any time during the qualified benefit period (as so 

21 determined), subsection (a) shall not apply to the 

22 taxable year which includes the date of such convic23 tion and all subsequent taxable years. 

24 ‘‘(c) QUALIFIED WRONGFULLY INCARCERATED INDI25 VIDUAL.—For purposes of this section, the term ‘qualified 


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1 wrongfully incarcerated individual’ has the meaning given 

2 to such term under section 139D(d). 

3 ‘‘(d) REFERENCE.—For reporting requirement, see 

4 section 139D(e).’’. 

5 (b) CONFORMING AMENDMENTS.— 

6 (1) Section 1324(b)(2) of title 31, United 

7 States Code, is amended by inserting ‘‘, 36B,’’ after 

8 ‘‘36A,’’. 

9 (2) The table of sections for subpart C of part 

10 IV of subchapter A of chapter 1 of the Internal Rev11 enue Code of 1986 is amended by inserting after the 

12 item relating to section 36A the following new item: 

‘‘Sec. 36B. Employment taxes of wrongfully incarcerated individuals.’’. 

13 (c) EFFECTIVE DATE.—The amendments made by 

14 this section shall apply to taxable years beginning after 

15 December 31, 2009. 

Æ 


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