Case: Dismissal of Taxpayers’ FICA Tax Refund Claims Affirmed

The U.S. Court of Appeals for the Federal Circuit affirmed the dismissal of taxpayers’ claims for refunds of FICA taxes paid on expected retirement benefits that were not fully received due to their employer’s bankruptcy, holding that the special timing rule for FICA taxes on deferred compensation under IRC §3121(v)(2) is constitutional. Taxpayers, retired airline pilots, sought refunds of FICA taxes paid when they began receiving retirement benefits under their employer’s nonqualified deferred compensation plan. The taxes were calculated based on the present value of expected future benefits, but the actual benefits received were less after the employer’s bankruptcy terminated ...