Oct. 1 — The U.S. Supreme Court granted certiorari to the government in its challenge to a U.S. Court of Appeals for the Sixth Circuit decision that payments a company made to employees as part of a severance program weren't subject to Federal Insurance Contributions Act taxes (United States v. Quality Stores, Inc., U.S., No. 12-01408, cert. granted 10/1/13).

The Sixth Circuit decision created a conflict with the holding by the U.S. Court of Appeals for the Federal Circuit in CSX Corp. v. United States, 518 F.3d 1328, 2008 BL 46216 (Fed. Cir. 2008), that the payments were dismissal pay subject to tax (106 DTR K-2, 6/3/13).

“It's not surprising that the government sought certiorari and that the court granted it,” Pratik Shah, a partner at Akin Gump Strauss Hauer & Feld LLP in Washington and a former assistant to the U.S. solicitor general, told Bloomberg BNA Oct. 1. “The court is especially interested when there is a split in tax administration. It's particularly compelling when people have to pay a tax in one part of the country and not another part of the country,” Shah said.