Pratik Shah Quoted by Bloomberg BNA on U.S. Supreme Court Review for FICA Case
For its article “Supreme Court to Consider Whether Severance Payments Subject to FICA,” Bloomberg BNA Pension & Benefits Daily quoted Akin Gump Supreme Court and appellate practice co-head Pratik Shah on the U.S. Supreme Court decision to grant certiorari to the U.S. government as it challenges a 6th Circuit decision that payments made as part of a severance program by a company to its employees were not subject to Federal Insurance Contributions Act taxes.
Shah said, “It's not surprising that the government sought certiorari and that the court granted it. The Court is especially interested when there is a split in tax administration. It's particularly compelling when people have to pay a tax in one part of the country and not another part of the country.”
He also noted, “You can't read too much into the grant of cert. The Court may not necessarily favor the government. Conformity is at issue, and the Court may not have preconceived notions.”
Discussing how this case might play out, Shah said, “The taxpayers have a strong case when I look at the textual and statutory argument in the Sixth Circuit — Section 3402(o) says ‘as if it were a payment of wages.’ The Supreme Court has taken broad construction of ‘wages’ so there could be an argument that the payments are wages.”
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