Supreme Court - Severance Subject to FICA

This week the Supreme Court decided the case of US vs. Quality Stores and reversed the 6th Circuit’s holding that severance payments made to terminated employees were not subject to FICA.  Quality Stores had brought a case to obtain refunds for both the employer and employee shares of FICA on behalf of itself and some of its terminated employees (terminated as a part of the business going into bankruptcy).  The Supreme Court held that severance payments made to terminated employees and not linked to the receipt of state unemployment benefits are considered to be remuneration for employment and are taxable wages under FICA (in line with the fact that they are also subject to income tax withholding).

Update on Freedom From Religion Foundation v. IRS

In August of last year I had commented on my interest in the Freedom from Religion Foundation’s challenge to the IRS’ selective enforcement (or, zero enforcement) of the prohibition on political activities against churches.  The case is still ongoing, however in early February the Court did allow another party to join the suit. 

Read more: Update on Freedom From Religion Foundation v. IRS

UPDATE: IRS Delays -- Where Is Your Exemption Application?

At the end of January, I wrote a blog post attempting to explain the IRS delays and pointing out the lack of information that then existed on their site.  Since the writing of that post, the IRS has updated/provided more information:[1]

Read more: UPDATE: IRS Delays -- Where Is Your Exemption Application?

IRS Delays -- Where is your exemption application?

A normal exchange these days between me and my clients applying for tax-exempt status: Client: “Have you heard anything from the IRS?” Me: “Nope.”

If you have applied for tax-exempt status lately or are involved with an organization that has – you have had this conversation too.  So what is going on??

****NOTE : This post was updated to reflect changes to the IRS site, comments on those changes can be found here. ****

Read more: IRS Delays -- Where is your exemption application?

Update on Revocations/Reinstatements

Every year around this time the IRS issues new, updated Revenue Procedures (basically, procedures to follow for whatever you need to do with the IRS).  Fascinating reading for all of you, I am sure.  What is fantastic and wonderful about this year’s revenue procedures is the changes that the IRS has made with regard to automatically revoked organizations (see my prior posts here and here).  The most exciting changes that have come with Revenue Procedure 2014-11 have to do with smaller organizations.

Read more: Update on Revocations/Reinstatements

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