Justices Tank $1B In Severance Pay Tax Refunds

Law360, New York (March 25, 2014, 7:12 PM ET) -- The U.S. Supreme Court’s Tuesday ruling in U.S. v. Quality Stores Inc. that certain severance payments made to employees terminated against their will are taxable wages under federal law puts to bed roughly 2,400 refund claims worth over $1 billion and has broad implications for settlement negotiations.

The high court's unanimous ruling will affect 11 similar lawsuits and likely halt roughly 2,400 pending refund claims that involve Federal Insurance Contributions Act tax withholding on employer severance payments, according to Quality Store's counsel.

“This decision is a...
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