Employers and employees may be entitled to refunds of FICA taxes paid on severance payments in connection with plant closings, reductions in workforce and similar events. Although the decision of the Federal District Court in U.S. v. Quality Stores, Inc. (W.D. Mich. No. 1:09-cv-44), which allowed a refund of FICA taxes paid on severance payments in connection with a reduction in workforce is likely to be appealed, taxpayers that have paid FICA taxes on similar payments should consider filing claims for refunds on IRS Form 941-X. Claims for refunds with respect to payments made in 2006 must be filed on or before April 15, 2010. The procedure for filing these refunds is fairly simple and can be accomplished with very little effort. If you have any questions about whether you may qualify for a tax refund or how to claim the refund, please contact your Baker Hostetler contact or any of the following individuals: Paul M. Schmidt, or 202.861.1760; Jeffrey H. Paravano, or 202.861.1770; Stuart J. Bassin, or 202.861.1736; William M. Toomajian, or 216.861.7569; Raymond M. Malone, or 216.861.7879; Christopher J. Swift, or 216.861.7461; or Ted T. Martin, or 513.929.3416.
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