Can an inmate file a tax return while being in prison? She has a job within the prison and heard about filing a income tax. Is this illegal? And would a family member be able to cash the check if she gives them POA?
Nothing comes to mind to prevent that person to file a return. In fact if their income exceed certain requirements, they must file a federal return. As to the POA, that would allow a check to be cashed but the POA holder may need to keep the check in account for the benefit of the prisoner. However, if the prisoner wants to make a gift he has the power to do so. However, you need to check with an estates/tax attorney in the state of incarceration to be sure about all this.
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From a strictly legal perspective, an inmate has an obligation to file a tax return if their income is above the filing threshold (around $12,000 if I recall correctly). As a practical matter, however, most inmates likely do not file income tax returns and I haven't come across many IRS audits of inmates. That being said, if the inmate expects to be freed from prison soon and expects a steady stream of income in the future, then he or she should file with the expectation of earning more income in the future.
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It is unlikely that a job in prison would derive sufficient income to file a tax return. However, if there is a return to be filed there is no law against it. The inmate can endorse the check and sign the return just as easily as signing a POA.
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