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U.S. justices to hear case on whether severance can be taxed
Source: Reuters
U.S. justices to hear case on whether severance can be taxed
By Lawrence Hurley
WASHINGTON | Tue Oct 1, 2013 10:58am EDT
(Reuters) - The Supreme Court agreed on Tuesday to consider whether severance pay in an involuntary layoff can be subject to federal payroll taxes in a case the Obama administration says could affect $1 billion in refund claims.
The administration asked the justices to hear the case after losing a dispute with agricultural retailer Quality Stores Inc. The company wanted a tax refund for just over $1 million in payroll taxes it paid when laying off workers.
The company sought the refund after entering bankruptcy in 2001. During that period it closed all of its almost 300 stores.
The legal question is whether the company was required to pay the taxes under the Federal Insurance Contributions Act, which helps finance federal retirement and healthcare benefits.
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By Lawrence Hurley
WASHINGTON | Tue Oct 1, 2013 10:58am EDT
(Reuters) - The Supreme Court agreed on Tuesday to consider whether severance pay in an involuntary layoff can be subject to federal payroll taxes in a case the Obama administration says could affect $1 billion in refund claims.
The administration asked the justices to hear the case after losing a dispute with agricultural retailer Quality Stores Inc. The company wanted a tax refund for just over $1 million in payroll taxes it paid when laying off workers.
The company sought the refund after entering bankruptcy in 2001. During that period it closed all of its almost 300 stores.
The legal question is whether the company was required to pay the taxes under the Federal Insurance Contributions Act, which helps finance federal retirement and healthcare benefits.
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Read more: http://www.reuters.com/article/2013/10/01/us-usa-court-severance-idUSBRE9900SJ20131001
