Tax Administration and Racial Justice: The Illegal Denial of Tax Based Pandemic Relief to the Nation's Incarcerated

This article examines the Internal Revenue Service’s administration of the Coronavirus Aid, Relief, and Economic Security (CARES) Act economic impact payment program and argues that the agency’s decision to deny and delay stimulus payments to incarcerated individuals constituted an unlawful exercise of administrative power with significant racial justice implications. The CARES Act broadly authorized economic impact payments for eligible individuals, yet the IRS adopted a policy that categorically excluded incarcerated persons from receiving relief despite the absence of statutory language supporting such a restriction. Through an analysis of the ensuing litigation, including the successful challenge brought in federal court, the article contends that the IRS’s policy was inconsistent with both the text and purpose of the CARES Act and violated administrative law principles governing agency action. Beyond the legal deficiencies of the policy, the article situates the controversy within broader discussions of tax administration, administrative burden, and racial equity. Drawing on theories of administrative burden and racialized burden, the article argues that the IRS’s actions imposed disproportionate hardships on incarcerated individuals and their families, many of whom are members of communities already disproportionately impacted by incarceration, poverty, and the COVID-19 pandemic. The article further highlights the practical barriers that incarcerated individuals faced in obtaining payments even after the policy was invalidated, including inadequate communication, limited access to filing mechanisms, and procedural obstacles embedded within IRS processes. By examining the relationship between tax administration and racial justice, the article demonstrates that administrative choices can reinforce existing social inequalities even when facially neutral. The article concludes by proposing a framework for anti-racist tax administration that emphasizes transparency, proactive consideration of racialized burdens, and greater sensitivity to the effects of administrative decision-making on vulnerable populations. [This abstract was written by Microsoft Copilot, a generative artificial intelligence.]