By: Derek Hawkins//May 2, 2017//
7th Circuit Court of Appeals
Case Name: Medical College of Wisconsin Affiliated Hospitals, Inc.
Case No.: 16-3863
Officials: EASTERBROOK, ROVNER, and SYKES, Circuit Judges
Focus: Tax Refund
Medical College of Wisconsin, a nonprofit corporation, received a refund of Social Security (FICA) taxes after the Internal Revenue Service ruled that medical residents were exempt from them until April 1, 2005. (A regulation governing later periods requires hospitals to pay FICA taxes on residents’ salaries. See Mayo Foundation for Medical Education & Research v. United States, 562 U.S. 44 (2011).) The IRS added to the refund approximately $13 million in interest but later demanded $6.7 million back, informing Medical College that it had used too high a rate. Medical College returned the money and filed this suit un‐ der 28 U.S.C. §1346(a)(1), asking to have the disputed sum restored. See also 26 U.S.C. §7422. The district court rejected its request, 2016‐2 U.S. Tax Cas. (CCH) ¶50,409 (E.D. Wis. Sept. 14, 2016), precipitating this appeal.
Affirmed