This is not major news, but since I previously blogged on the Quality Stores case (“Federal Appellate Court Rules that SUB Payments are not “Wages” for FICA Tax Purposes”), I wanted to help interested readers close the book on it. 

In 2012, a federal appellate court held that severance payments were not wages subject to FICA taxes, which lead more than 3,000 employers to file for claims for refund of FICA taxes previously paid on severance payments. In March 2014, the U.S. Supreme Court ruled in the case U.S. v. Quality Stores Inc., 134 S. Ct. 1395 (2014), that severance payments to laid-off workers are subject to Social Security and Medicare taxes. 

Last week, the Internal Revenue Service issued Announcement 2015-8, which states simply and flatly that it will take no further actions on any claims or appeal for refund of employment taxes in light of the Supreme Court’s decision, as, “There is no basis for taxpayer to appeal the disallowance to the IRS Office of Appeals with respect to that issue.”