Mandatory Savings Accounts
Twenty percent of all offender facility work and private sector income (work release and PIE program) shall be apportioned to an offender mandatory savings account per O.S. 57, section 549, paragraph 5. These savings shall be payable to the offender upon his or her discharge. Funds from this account may be transferred to the offender’s draw account for use by the offender for fees or costs associated in filing a civil or criminal action as defined in O.S. 28, section 151 et seq. of the Oklahoma Statutes or for federal action as defined in 28 U.S.C., section 1911 et seq. An offender does not have the right, use, or control of any interest derived from any funds placed in a mandatory savings account (O.S. 57, section 549, paragraph 6).
Offender Mandatory Savings Report
Offender mandatory savings account balances and transactional information is available by running the “Offender Mandatory Savings Report.” Reconstructing an offender’s mandatory savings account’s balance is generally possible by running this report from OBS inception date (February 1, 2009 for female offenders and May 1, 2009 for male offenders) to the current date. All mandatory savings account transactions will be display using this approach.
Offender Draw / Available Balance
Offender draw accounts are those balances established in the Offender Banking System for use by the offender to deposit, expend or transfer funds for their personal use while incarcerated. An offender shall not have the right, use or control of any interest derived from any funds associated with their draw balance.
Interest Bearing Savings Accounts (IBSA)
Offender interest bearing savings accounts are separate offender savings accounts established in the Offender Banking System under the authority of O.S. 57, section 549, paragraph 7. The department will credit interest to the offender’s interest bearing savings account based on the offender’s pro rata IBSA balance and the other accounts that make up the total commingled account balance in the 700 Fund. Facilities and department staff will keep all IBSA account information confidential and will only disclose information regarding IBSA accounts balances to the offender and authorized staff. The Director of the Department of Corrections will make the determination of those staff authorized to have IBSA account information.
IBSA Account Request
Offenders will use an IBSA Account Request form (Attachment A) for all IBSA account deposits and withdrawals. Deposits into the interest-bearing savings account require the entry of a validated offender’s social security or tax payer identification number and will only be allowed when an offender’s available balance is one hundred Dollars ($100.00) or greater. However, no IBSA account transfer will be honored if it reduces an offender’s available balance below $100. The offender’s mandatory savings account balance will not be used to determine the eligibility of the offender to participate in the interest-bearing savings account.
Offenders can request a transfer from their draw account to their IBSA account when their available balance exceeds one hundred dollars ($100.00). Offenders who participate in the interest-bearing account will only be allowed to transfer funds from their interest-bearing savings account to their draw account once every ninety (90) days. Any transfer of IBSA account balances to the offender’s trust account will be subject to current offender obligations and auto deductions. All offender transfers to or from their IBSA account to their trust account must be approved by the offender’s assigned facility Warden/District Supervisor or designee prior to transfer.
Taxation of Offender Interest Earned
IBSA interest paid to an offender is not exempt from federal or state income tax for reporting purposes. Interest credited to an offender’s account in OBS is based on constructive receipt, meaning the date the interest was posted to the offender’s IBSA account. Offenders are responsible for compliance with all federal and state tax filing requirements of this income.
The department will provide each IBSA account holder, no later than January 31st, a federal form 1099-INT showing the amount of interest posted to their IBSA account for the preceding taxable year. The s Chief Financial Officer is responsible for the preparation, issuance and appropriate distribution of the 1099-INT forms. 1099-INT information will be based on the data provided from the OBS system using the “Interest Posted Report” under Administrative Reports.
External Bank Accounts
External banks accounts for offenders are not authorized upon implementation of the OBS system. Staff shall not have co-signature authority on any offender bank account. Offenders with legacy external banks accounts with staff signatures on them are required to close those external bank accounts and/or establish IBSA accounts if they wish to maintain control of over these funds. If an offender elects to transfer the external bank account’s signature authority to a trusted family member, friend, or an attorney created and court clerk filed trust document and/or power of attorney; then all costs associated with the closing of the external bank account and the creation of these documents is the responsibility of the offender.
Business managers can assist offenders in the closing of outside bank accounts and transferring money to an IBSA. Offenders may not make any new deposits into or receive money from an outside bank account unless it is in conjunction with closing the account. Funds transferred from an external bank account to an IBSA account will first be deposited into the offender’s draw account and then transferred to IBSA. Facilities and department staff will keep all IBSA account transaction information confidential and will only disclose information regarding IBSA accounts to the offender and specifically authorized staff.