MAYO FOUNDATION v. UNITED STATES

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Case Basics
Docket No. 
09-837
Petitioner 
Mayo Foundation for Medical Education and Research, et al.
Respondent 
United States
Decided By 
Advocates
(for the petitioners)
(Assistant to the Solicitor General, Department of Justice, for the respondent)
Term:
Facts of the Case 

The Mayo Foundation for Medical Education and Research ("Mayo") and the University of Minnesota ("University") sued the United States in a Minnesota federal district court seeking a refund for taxes paid under the Federal Insurance Contributions Act ("FICA"). They argued that payments made to doctors in their residency qualify for FICA's student exemption. The district court agreed and awarded judgment in favor of Mayo and the University.

On appeal, the U.S. Court of Appeals for the Eighth Circuit reversed, holding that the residents in this case did not qualify for the FICA exemption. The court reasoned that Treasury Regulation 26 U.S.C. § 3121(b)(10) excludes "full-time employees" from the FICA student exemption. Here, the resident doctors were full-time employees and, therefore, were excluded from the FICA exemption.

Question 

Can the Treasury Department categorically exclude all medical residents who meet the FICA definition of student and who would be subject to the FICA student exemption?

Conclusion 
Decision: 8 votes for United States, 0 vote(s) against
Legal provision: 26 U.S.C. § 3121(b)(10)

Yes. Chief Justice John G. Roberts, Jr. writing for a unanimous Court, upheld the Treasury Department's rule that treats medical residents as full-time employees, and therefore not exempt from the payment of payroll taxes is a valid interpretation of federal law. Justice Elena Kagan did not take part in the decision.

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MAYO FOUNDATION v. UNITED STATES . The Oyez Project at IIT Chicago-Kent College of Law. 10 September 2014. <http://www.oyez.org/cases/2010-2019/2010/2010_09_837>.
MAYO FOUNDATION v. UNITED STATES , The Oyez Project at IIT Chicago-Kent College of Law, http://www.oyez.org/cases/2010-2019/2010/2010_09_837 (last visited September 10, 2014).
"MAYO FOUNDATION v. UNITED STATES ," The Oyez Project at IIT Chicago-Kent College of Law, accessed September 10, 2014, http://www.oyez.org/cases/2010-2019/2010/2010_09_837.