March 15, 2010

IRS Concedes on Certain FICA Refund Claims for Medical Residents

The IRS has thrown in the towel with respect to pre-April 1, 2005, medical resident FICA claims based on the so-called “student exception.” The agency announced on March 2, 2010, that certain medical residents who worked at hospitals, universities and other institutions were not subject to employment (FICA) tax on wages earned for services rendered in connection with their education. To qualify, the institutions that employed medical residents or the individual residents must have timely filed FICA refund claims for tax periods ending before April 1, 2005 (i.e., the effective date of new Treasury Regulations).

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