I have never been to prison (Tim and Bill were shocked, too!), but from what I’ve read, it’s not a very nice place. All the documentaries on TV really paint prison as the ultimate uncomfortable living situation: one must constantly meet new people, there is no autonomy regarding bedroom décor and, you know, sometimes one gets stabbed with a sharpened toothbrush.
While reading The Kiplinger Tax Letter recently, another drawback of prison living was brought to my attention: filing tax returns. Kiplinger mentioned “an ex-basketball player in prison for running a Ponzi scheme [who] got a big pension payout from the NBA.” The ex-basketball player said that he couldn’t file his return, as “he had no access to his tax records.”
Kiplinger didn’t mention the ball player’s name and, since I am a bit of a yenta (and not a big sports fan), I looked around the Internet a bit.
It turns out that the gentleman’s name is Claude Tate George and he was a player for the New Jersey Nets and Milwaukee Bucks. In 2013, according to Courant.com, George was sentenced to nine years after being found guilty for a real estate Ponzi scheme “in which investors lost $2.55 million.”
Also, in 2013, “the NBA paid George a $208,111 pension distribution” (Marketwatch.com). When George didn’t file a return that year, “IRS officials took it upon themselves to file the return.” Eventually, the IRS said that George “had a $28,696 unpaid tax balance.”
George appealed, saying that if he had done his own return, he could have shown deductions that the IRS wasn’t aware of. Strangely, the Internal Revenue Service wasn’t sympathetic and the decision regarding his unpaid tax stood, complete with penalties.
Most incarcerated people won’t experience the same situation. In general, most incarcerated people won’t have to file a tax return at all, as prison jobs don’t pay enough to warrant one. However, as the Malta Justice Initiative points out, if the inmate is “receiving other forms of income from investments, income earned before [being] incarcerated” or filing a tax return with a working significant other, a return would need to be filed.
From all that I’ve been reading about filing from prison, Claude Tate George didn’t make a very strong argument. Most state penitentiaries offer free tax forms, enough jailhouse accountants to fill, well, a jail and mail service. Furthermore, most states allow visitors to bring tax forms for an inmate’s signature.
Don’t go to prison this tax season. But, if you happen to find yourself in a precarious jail-ish position, your Bourke Accounting professional is there for you. I’m not saying that your Bourke Accounting associate will love visiting you at the Blackburn Correctional Complex, but they will. If you did something, let’s say, untoward, your Bourke Accounting tax preparer doesn’t want you to compound it with IRS troubles, too!
Written by Sue H.