[Congressional Record Volume 153, Number 186 (Thursday, December 6, 2007)]
[Senate]
[Pages S14850-S14851]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. SCHUMER (for himself and Mr. Brownback):
  S. 2421. A bill to amend the Internal Revenue Code of 1986 to provide 
tax benefits to individuals who have been wrongfully incarcerated; to 
the Committee on Finance.
  Mr. SCHUMER. Mr. President, today, I want to say a few words about 
the bill I am introducing, the Wrongful Convictions Tax Relief Act of 
2007. My bill would provide much-needed assistance to individuals who 
have been wrongfully convicted of a crime and subsequently exonerated 
by clarifiying that State compensation awards are tax-free; and stating 
that exonerees shall have their first $50,000 of earnings free of 
federal income and payroll taxes for each year that they were 
wrongfully imprisoned. The second benefit would only apply to those who 
have never been convicted of a felony for which they were not 
exonerated. If they had a conviction prior to their wrongful 
conviction, they would not be eligible. If they are subsequently 
convicted, they would lose their eligibility as well.
  I want to thank Senator Brownback for offering to be the lead 
Republican cosponsor of my bill. He and I have worked together on a 
number of issues now, and I appreciate his willingness to support this 
legislation.
  As my colleagues are surely aware, whatever their political leanings 
may be, this bill addresses an incredibly timely and important issue. 
Just 2 days ago, a Federal prosecutor in Jacksonville, Florida 
dismissed a murder case against a Florida man, based on DNA evidence, 
exonerating him in a 1994 murder. According to the Innocence Project, 
this man represents the 209th person nationwide exonerated by DNA 
testing.
  More and more innocent people are regaining their freedom through 
post-conviction DNA testing. No matter what your view may be of the 
death penalty; no matter what your view may be of mandatory sentencing 
laws; no matter how ``tough on crime'' you want to be--surely everyone 
would agree that when innocent people spend time in prison for crimes 
that they did not commit, something of value has been taken from them.
  In this country, everyone is entitled to a fair trial. Yet for those 
wrongfully convicted of a crime, our legal system has failed them. Some 
of the common causes of wrongful convictions include eyewitness 
misidentification, unreliable or limited evidence tests, and false 
information presented by informants. Even more sobering, more than a 
quarter of all prisoners exonerated by DNA evidence had falsely 
confessed or made incriminating statements, simply to end hours of 
aggressive interrogation.
  Thankfully, advocacy groups such as the Innocence Project and the 
Justice Project have taken on the challenge of addressing what can only 
be described as a systemic problem. The Innocence Project at the 
Cardozo School of Law in New York City has been a tireless leader in 
overturning wrongful convictions, and has led the charge in using DNA 
evidence to prove, once and for all, a person's innocence. With new 
improvements in DNA testing and technology, we can now positively 
identify or rule out suspects based on DNA evidence left at the scene 
of a crime. In most wrongful conviction cases, new testing of DNA 
evidence taken from the crime scene years before points to another 
perpetrator.
  Once released, exonerees face huge and sometimes insurmountable 
challenges. Multiple studies have shown that upon release, these 
individuals often have difficulty reentering society. They have lost 
the prime years of their life, serving time in prison for crimes they 
did not commit. The vast majority of exonerated individuals entered 
prison in their teens or 20s, and they stayed there while some of their 
peers on the outside settled on careers, married, started families, 
bought homes, and began saving for retirement. They have emerged from 
prison many years behind, and it is difficult to catch up. Think about 
how much the economy has changed in just the last 10 years, and think 
about how difficult it would be to adjust if you had spent that time 
behind bars.
  Shockingly, despite being imprisoned for an average of 12 years, 
exonerees typically leave prison with less help pre-release counseling, 
job training, substance-abuse treatment, housing assistance and other 
services than some states offer to paroled prisoners. Even the basic 
tasks that seem so unremarkable to you and I, like going to the grocery 
store, paying bills, and getting to and from work, are huge tasks for 
someone who has spent so much time in prison. In fact, in some cases, 
people have lost jobs once their employers find out about their past

[[Page S14851]]

conviction, despite the fact that they have been exonerated of the 
crime. I know that sounds unbelievable, but it's true. You didn't 
commit the crime, it is proven that you didn't commit the crime, but 
you still lose your job. Imagine for just a moment if this happened to 
one of your friends or family members. You would be outraged. The 
unfairness is heartbreaking.
  Certainly we can all agree that these individuals deserve and need 
support after their release, and lawmakers on both the state and 
federal level have begun to address the question of compensation for 
wrongfully convicted individuals. In 2004, Congress passed the Justice 
for All Act, which I am proud to have cosponsored. This bill, among 
other things, raised the cap for potential federal compensation awards 
for wrongful convictions to $100,000. Although the federal compensation 
has not been claimed, this landmark piece of legislation set a 
precedent for state compensation laws. As of now, 22 States have 
followed suit and passed compensation laws as well. But the system is a 
patchwork. Some States, such as Maine and New York, provide exonerees 
with a lump sum as the court sees fit, and cap these awards at specific 
levels. Other States, such as California and Texas, give compensation 
based on time spent in jail. Only a few States, such as Louisiana, 
offer compensation to cover costs such as vocational training, medical 
bills and counseling, to aid re-entry.
  We can and should do more. Of all people known by the Innocence 
Project to have been exonerated through DNA evidence as of August 2007, 
at least 79--nearly 40 percent--didn't receive a dime to compensate 
them for their years in prison. Even when someone is awarded 
compensation, they can wait in limbo for years. More than half of those 
who did receive compensation waited two years or longer after 
exoneration for the first payment, forcing them to rely on family, 
friends, lawyers, and even strangers for shelter, clothing, food and 
emotional support immediately after their release.
  The Federal Government cannot and should not offer cash compensation 
for those who have been wrongfully convicted by state courts, but we do 
have the power to address how compensation awards are taxed, and how 
these individuals are taxed once they try to rebuild their lives. We 
can help even the playing field across all States by changing the law 
to ensure that there are some benefits that will be consistent across 
all 50 States. My bill changes the law in a number of ways to ensure 
that there are some benefits available to everyone, regardless of which 
State they call home.
  The first change in my bill is more of a clarification than a new tax 
benefit. If an exoneree does receive a state compensation award, the 
Federal tax laws are unclear as to whether these awards are taxable. 
According to the Innocence Project, the Internal Revenue Service has 
not yet made any attempts to tax these awards, but the concern remains 
that the IRS could make such a claim in the future. My bill 
specifically clarifies that any civil damages, restitution, or other 
monetary awards related to the wrongful imprisonment are excluded from 
taxable income.
  The second change in my bill will help provide much-needed economic 
assistance to exonerees that are trying to rebuild their lives, but 
finding it hard to make ends meet. My bill says that, for every year 
that someone was wrongfully imprisoned and then exonerated, up to 15 
years, the first $50,000 they earn each year after their release will 
be free of Federal income and payroll taxes. For married couples filing 
jointly, the tax-free amount would be $75,000 per year. Again, the 
benefit would only apply to those who have never been convicted of a 
felony. If they had a conviction prior to their wrongful conviction, 
they would not be eligible. If they are subsequently convicted, they 
would lose their eligibility as well.
  In terms of real dollars, let us take the example of someone earning 
$20,000 post-imprisonment. In a typical tax filing scenario, my bill 
will save them nearly $2,800 in income and payroll taxes. This is a 
real benefit that can make wages go just that much farther--it can pay 
for a few months' rent, or a community college course, or any number of 
things that can help this victim return to a productive life.
  As my colleagues know, I feel very strongly about justice and 
fairness. I am not one to shy away from making tough decisions to 
strengthen our laws, but I also believe that when someone has been 
treated unfairly by the law, it is our responsibility to provide some 
help. I sincerely believe that people who have been wrongfully 
convicted of a crime have had parts of their lives taken from them, 
plain and simple.
  Mr. President, I thank you for the opportunity to speak on the issue 
of fair compensation for wrongful convictions. I stand ready to work 
with Senator Brownback and my colleagues on both sides of the aisle, 
including the chairman and ranking member of the Finance Committee, to 
get this bill enacted next year.
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