Now how many cigarettes will $250 buy?

August 26, 2009

Crime reportedly doesn't pay, but Uncle Sam recently handed out $250 checks to almost 4,000 jailed felons.

The payments were mistakenly issued as part of the American Recovery and Reinvestment Act, popularly known as the February 2009 stimulus law.

Under the Making Work Pay credit portion of the new law, workers have seen a smaller amount of payroll taxes withheld from their paychecks.

But folks who don't have jobs also got a stimulus benefit. Separate $250 checks were sent to 54.4 million beneficiaries of Social Security, veterans and
federal railroad payments.

Criminal behind bars And some of those check recipients are behind bars.

Excuse me in advance for pointing out the obvious: For the most part, the stimulus checks were sent in error.

Around 2,200 of the incarcerated recipients, however, can keep their checks. While jailed convicts generally are ineligible to receive federal benefits, the Social Security Administration says that inmates who were not in prison between November 2008 and January 2009 can legally
accept them.

As for the other inmates, federal officials are trying to track down the errant checks and get the money back.

The Boston Herald broke the story, noting that the Bay State's inmate recipients included a convicted first-degree murderer, three prisoners
jailed for second-degree murder and five convicted rapists.

Here in Texas, the Austin American-Statesman reports that prison officials held onto 240 stimulus checks that arrived at state lockups until
it was confirmed that the prisoners were eligible to receive the money.

After double-checking, LoneStar State officials sent back all 214 incorrectly issued Veterans Affairs checks. Seven of the 24 Social
Security checks that were sent to prisoners were cashed. The two recipients of stimulus-related Railroad
Retirement checks also were allowed to cash them.

The Social Security Administration Inspector General says his office also is investigating whether any improper payments were made to
dead beneficiaries, felons on the run from the law, individuals living
overseas and recipients no longer legally authorized to live in the
United States.

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Those procrastinating filers aren’t a problem. In fact, the IRS appreciates taxpayers who take time to fill out their 1040 forms correctly. It also is grateful that tax submissions are spread out a bit, especially now that the IRS is a leaner agency. Processing returns is easier when they arrive throughout the year instead of in massive bunches.

But enough about Uncle Sam’s tax collection issues. The focus now is on all y’all who filed for extensions, giving you another six months to complete your return. Since your new mid-October due date will be here before you know it, let’s get started now on meeting it.

The ol’ blog is here to help you finish up your extended Form 1040. You can start with January’s tax tips page, which has links to the rest of the year’s tips by-month collections. You also can peruse various tax categories for more tailored advice by clicking on the More Tax Posts drop-down menu at the top of this (and every) page.

And to make sure you don’t miss your new filing deadline, the count-down clock below will let you know just how much time you to file by Oct. 15. At the latest.e. (Note: I’m in the Central Time Zone, so adjust accordingly for where you live.)

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