Are Severance Payments Subject to FICA?

According to the recent decision in United States v. Quality Stores, Inc., No. 1:09-cv-44 (W.D. Mich. Feb. 23, 2010) (“Quality Stores”), severance payments resulting from an involuntary termination are not subject to taxation under the Federal Insurance Contributions Act (“FICA”) because such payments do not constitute “wages.” Prior to Quality Stores, it was generally accepted…

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HIRE Act Signed into Law

On March 18, 2010 the President signed the Hiring Incentives to Restore Employment Act of 2010 (“HIRE”) into law.  HIRE provides $13 billion worth of tax incentives to businesses in the form of – (1) Temporary payroll tax relief for employers who hire individuals that have been unemployed at least 60 days; (2) An income…

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Reporting Uncertain Tax Positions

The Internal Revenue Service (the “Service”) is considering requiring businesses to report “uncertain tax positions”  if they are “a business taxpayer with total assets in excess of $10 million…. [or] a taxpayer who prepares financial statements, or is included in the financial statements of a related entity, so long as that taxpayer or related entity…

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Taxation of Carried Interest – The Debate Continues as Legislation Looms

I first wrote about proposed changes in the taxation of carried interests (the manager’s share of income from a venture or private equity fund) in June of 2008 (see http://archive.constantcontact.com/fs056/1101631528224/archive/1102150842963.html). Last December, the House finally approved a bill to tax carried interests at ordinary income rates rather than capital gains rates (and subject such profits…

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