Although at a quick glance, the case United States v. Quality Stores might appear, as a friend described it, “as dry as dust,” it is actually a case that employers should watch closely.
The question presented to the U.S. Supreme Court is whether severance payments made to employees whose employment was involuntarily terminated are taxable under the Federal Insurance Contributions Act (FICA). Much is at stake: the U.S. government has warned in court filings that the Internal Revenue Service could owe over $1 billion in thousands of tax refund claims to businesses and individuals if the Supreme Court upholds the decision of the U.S. Court of Appeals for the Sixth Circuit.
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