Medical Residents Must Pay Taxes, High Court Rules

Law360, New York (January 11, 2011, 2:37 PM EST) -- The U.S. Supreme Court ruled unanimously Tuesday that medical residents aren't exempt from payroll taxes, declining to force the U.S. Internal Revenue Service to recognize the physicians-in-training as students.

A student designation would have exempted residents from paying Social Security taxes under the Federal Insurance Contributions Act, according to the 8-0 opinion. Justice Elena Kagan did not participate in the decision.

"Regulation, like legislation, often requires drawing lines," Chief Justice John Roberts wrote for the court. "Focusing on the hours an individual works and the hours...
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