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Time Runs Short for Wrongfully Convicted to Get Tax Relief

Under the Federal Wrongful Conviction Tax Relief Act of 2015, any money received in relation to a wrongful conviction and incarceration – including lawsuit settlements and back pay – is now expressly excluded from taxable income.

This language is codified in Internal Revenue Code §139F which states:

Certain amounts received by wrongfully incarcerated individuals –

(a) Exclusion from gross income – In the case of any wrongfully incarcerated individual, gross income shall not include any civil damages, restitution, or other monetary award (including compensatory or statutory damages and restitution imposed in a criminal matter) relating to the incarceration of such individual for the covered offense for which such individual was convicted.

(b) Wrongfully incarcerated individual – For purposes of this section, the term “wrongfully incarcerated individual” means an individual:

(1) who was convicted of a covered offense,

(2) who served all or part of a sentence of imprisonment relating to that covered offense, and

(3)(A) who was pardoned, granted clemency, or granted amnesty for that covered offense because that individual was innocent of that covered offense, or (B) (i) for whom the judgment of conviction for that covered offense was reversed or vacated, and (ii) for whom the indictment, information, or other accusatory instrument for that covered offense was dismissed or who was found not guilty at a new trial after the judgment of conviction for that covered offense was reversed or vacated.

(c) Covered offense – For purposes of this section, the term “covered offense” means any criminal offense under Federal or State law, and includes any criminal offense arising from the same course of conduct as that criminal offense.

What is even better is this new federal law is being applied retroactively, and thereby makes refunds available to anyone who at any time paid federal income tax on wrongful compensation money. The refunds will include interest, and where the wrongfully incarcerated individual is deceased, may be claimed by that person’s estate.

But keep in mind that Internal Revenue Code §139F only applies to persons who were wrongfully incarcerated and not to beneficiaries of any resulting award.

For some refund claims the deadline could be as early as December 17, 2018 to file a claim so if you may qualify for a refund under this law you should act quickly.

What Should You Do?

You know that at the Law Offices Of Jeffrey B. Kahn, P.C. we are always thinking of ways that our clients can save on taxes. If you are selected for an audit, stand up to the IRS by getting representation. Tax problems are usually a serious matter and must be handled appropriately so it’s important to that you’ve hired the best lawyer for your particular situation. The tax attorneys at the Law Offices Of Jeffrey B. Kahn, P.C. located in Orange County (Irvine), San Francisco Bay Area (San Francisco, Walnut Creek and San Jose) and elsewhere in California are highly skilled in handling tax matters and can effectively represent at all levels with the IRS and State Tax Agencies including criminal tax investigations and attempted prosecutions, undisclosed foreign bank accounts and other foreign assets, and unreported foreign income.  Additionally, if you are involved in the cannabis industry, check out Cannabis Tax Attorney.

Request A Case Evaluation Or Tax Resolution Development Plan

Get a Tax Resolution Development Plan from us first before you attempt to deal with the IRS. There are several options for you to meet or connect with Board Certified Tax Attorney Jeffrey B. Kahn. Jeff will review your situation and go over your options and best strategy to resolve your tax problems. This is more than a mere consultation. You will get the strategy or plan to move forward to resolve your tax problems! Jeff’s office can set up a date and time that is convenient for you. By the end of your Tax Resolution Development Plan Session, if you desire to hire us to implement the strategy or plan, Jeff would quote you our fees and apply in full the session fee paid for the Tax Resolution Development Plan Session.

Types Of Initial Sessions:

Most Popular GoToMeeting Virtual Tax Development Resolution Plan Session
Maximum Duration: 60 minutes - Session
Fee: $350.00 (Credited if hired*)
Requires a computer, laptop, tablet or mobile device compatible with GoToMeeting. Please allow up to a 10-minute window following the appointment time for us to start the meeting. How secure is GoToMeeting? Your sessions are completely private and secure. All of GoToMeetings solutions feature end-to-end Secure Sockets Layer (SSL) and 128-bit Advanced Encryption Standard (AES) encryption. No unencrypted information is ever stored on our system.


Face Time or Standard Telephone Tax Development Resolution Plan Session
Maximum Duration: 60 minutes - Session
Fee: $350.00 (Credited if hired*)
Face Time requires an Apple device. Please allow up to a 10-minute window following the appointment time for us to get in contact with you. If you are located outside the U.S. please call us at the appointed time.


Reduced Fee Face-To-Face Tax Development Resolution Plan Session (Irvine Office Only)
Maximum Duration: 60 minutes - Session
Fee: $350.00 (Credited if hired*)
Session is held at our main office. 15615 Alton Parkway, Suite 450, Irvine, CA 92618.


Standard Fee Face-To-Face Tax Development Resolution Plan Session (Any Location Outside Our Irvine Office)
Maximum Duration: 60 minutes - Session
Fee: $600.00 (Credited if hired*)
Session is held at any of our offices outside our Irvine office or any other location you designate such as your financial adviser’s office or your accountant’s office, your place of business or your residence.


Jeff’s office can take your credit card information to charge the session fee which secures your session.

* The session fee is non-refundable and any allotted duration of time unused is not refunded; however, the full session fee will be applied as a credit toward future service if you choose to engage our firm.