Thompson v. IRS

Background

Rodney Thompson, a Texas state prisoner proceeding without a lawyer, brought a civil action against the IRS. He had permission to proceed without paying the filing fee. Thompson sought court intervention to obtain economic impact payments under the Coronavirus Aid, Relief, and Economic Security Act, commonly called the CARES Act. He stated that he had not received his payments.

Screening standard

Because Thompson was a prisoner suing a governmental entity, the court was required to screen the complaint under 28 U.S.C. § 1915A. Screening is an initial review in which the court identifies claims that may proceed and dismisses claims that are frivolous, malicious, fail to state a legally sufficient claim, or seek money from an immune defendant. The court also applied the rule that a complaint must provide enough factual allegations to make the requested relief plausible, not merely assert labels or conclusions.

Economic impact payments and the earlier class action

The CARES Act created a tax credit for eligible individuals and authorized advance payments of that credit. The law required the IRS to issue or credit qualifying payments as quickly as possible but provided that no refund or credit could be made or allowed under the relevant provision after December 31, 2020.

The opinion discussed an earlier related class action concerning incarcerated people and these payments. In that case, the court declared that the law did not permit the IRS to withhold payments solely because a person was or had been incarcerated, and that the IRS policy treating people incarcerated at any time in 2020 as ineligible was arbitrary, capricious, and unlawful. The earlier court ordered the IRS to reconsider payments denied solely because of incarceration. It expressly did not decide whether particular individuals were owed payments or how much they were owed; those determinations were left to the IRS.

Court’s reasoning

The court found that Thompson was a member of the earlier class. To the extent he claimed that his payment was denied solely because he was incarcerated, the court said he was not entitled to separate individual injunctive or equitable relief because that request duplicated the existing class action. The opinion stated that class members could pursue additional action through the class representatives and attorneys, including contempt proceedings or intervention in the class action.

To the extent Thompson sought an order requiring the IRS to provide his payments under the earlier class action or the CARES Act, the court rejected that request for two reasons. First, the earlier class action did not establish that every incarcerated person was owed a payment. Second, the December 31, 2020 statutory deadline had passed, so the CARES Act no longer allowed the payments to be issued. The court concluded that Thompson could not obtain the relief he requested.

Disposition

The court held that Thompson failed to state a claim for relief. It dismissed the complaint without leave to amend because it found that no amendment could cure the identified problems. In its conclusion, the court stated: “The action is DISMISSED with prejudice.” The clerk was ordered to close the case. Judge Phyllis J. Hamilton signed the order.