Federal Circuit Upholds Dismissal of Retired Pilots’ FICA Tax Refund Claims

The U.S. Court of Appeals for the Federal Circuit held that retired pilots’ claims for refunds of FICA taxes paid on nonqualified deferred compensation benefits were properly dismissed for lack of jurisdiction, affirming the Court of Federal Claims’ decision. Taxpayers, retired United Airlines pilots, sought refunds of FICA taxes paid when they began receiving retirement benefits under United’s nonqualified deferred compensation plan. The taxes were paid in a lump sum based on the calculated present value of each pilot’s benefit package, pursuant to IRC §3121(v)(2). After United’s bankruptcy, the plan was terminated, and pilots received less in benefits than expected. ...