Taxing the wrongfully convicted

November 24, 2010

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A recent IRS decision is good news for wrongfully convicted people in Illinois, and across the country. The decision came in the case of Chicagoan Darby Tillis. He spent 9 years in prison for a double murder he didn't commit.

When I went to interview Darby Tillis he wanted to meet in the parking lot of a Dunkin Donuts on Chicago's North Side.

I parked next to an old, white, stretched Cadillac limo.

The windows were tinted but I thought I could kind of see a man sitting in the back seat so I hesitantly tapped on the window and Tillis invited me in.

TILLIS: 94 stretch funeral car, it's turned into a limosine.

Tillis calls this car God's Holy Wagon.

He says it's big enough to haul around all the stuff he uses for preaching on street corners, including a generator which is in the trunk and explains why the inside of the limo reeks of gasoline.

Tillis is dressed in a black hat, black coat, black pants tucked into black cowboy boots and a long black robe.

TILLIS: And some people say, why you wear the robe and you wear the black and I say, well, when I come down the street you either think I'm a man of God or zip damn fool coming down the street, which way you wanna take it.

As a preacher, Tillis has a simple message.

TILLIS: Stop the violence.  Stop the killing.  Thou shalt not kill.

That message is painted in red block letters on the outside of his limo and its somehow ironic coming from Tillis.

In the late 70s he was convicted of murdering two employees of a hotdog stand and sent to prison.

TILLIS: Death row, you're there to die.  You sit there every day, facing death, not knowing when they're going say, come on, pack em up we're gonna kill you.  You're in hell.  You're dying while waiting to be killed.

Tillis was eventually acquitted because one of the witnesses against him told her coworker that it was actually her boyfriend who committed the murders.

That co-worker provided the testimony that got Tillis out of prison in 1987.

TILLIS: 9 years, 1 month and 17 days.  When I walked off death row i didn't even have 25 cents and about 10, 12, 13 years later they all of a sudden came up and said we got some wrongly conviction money for you.  Say wow.  So they gave us a hundred and twenty thousand dollars.  

That award comes out to around 36 bucks a day, or a dollar fifty for every hour he spent on death row.

Fast forward to this year.

In March, the IRS alerted Tillis that he owed taxes on the money, along with interest.

TILLIS: If you give me some money, take out the taxes.  Here I am a poor broke guy done lost 9 years out of my life, for nothin, and all of a sudden you give me some money and I'm like, whoopey doo. Finally I got my hands on a few dollars, then all of a sudden you come to me and ask me for 50 thousand dollars back?

TENENBAUM: It was in excess of 70.

Sam Tenenbaum is an attorney with Northwestern University's Bluhm legal clinic.

He's looking through Tillis' file trying to find the most recent dollar number the IRS wanted Tillis to pay.

TENENBAUM: It was 72 thousand four hundred dollars and 38 cents.

Tenenbaum appealed the IRS assessment.

He made a personal injury argument.

He explains that tax law says that if you're hurt in a car accident and you get a settlement, that money is tax free.

TENENBAUM: Obviously it's a personal injury if you're locked in a cell for a number of years.

The appellate division of the IRS found the arguments persuasive and decided that Darby Tillis' hundred and twenty thousand dollar award should not be taxed.

WARDEN: Darby is one of 57 men and women in Illinois who have received these judgments as a result of having been imprisoned for crimes they didn't commit.

Rob Warden is the director of the Center on Wrongful Convictions at Northwestern.

WARDEN: This decision would seem, means that the rest are home free and they'll get to keep all the money that the state of Illinois gave them for their wrongful imprisonment.

Tillis was one of the first wrongfully convicted men in Illinois to be exonerated.

An IRS spokeswoman says they don't comment on individual cases, but a memo earlier this month from the office of the Chief Counsel for the IRS amends section 104 a 2 of the Internal Revenue Code.

The change means nationwide, when state's award payouts to wrongfully convicted people, the IRS will no longer try to tax those payments.