Case law analysis

Name

Institution

Professor

Course

Date

United States vs Quality Stores Inc
The case of United States government vs quality stores, Inc. was argued on 14th January, 2014 and decided on 25th march 2014. The plaintiff was the United States government with the petitioner being quality stores, Inc. the respondent was accused of making severance payments to its involuntarily terminated employees. The payments made varied depending on the seniority of the employees and the time they served and was not connected to receipts of the state insurance for unemployment. This led to the respondent withholding inter alia taxes that were supposed to be paid to the state as per the Federal Insurance Contribution Act (United States vs Quality stores Inc. et al, 2014).
The disagreement occurred since Quality stores Inc. believed that severity payments were not taxable as per the Federal Insurance Contributions Act and was seeking a reimbursement on behalf of itself and its 1850 terminated former employees. Proceedings were initiated at the bankruptcy court since the internal revenue service never allowed or denied the refund and ultimately, the summary judgement made went in favor of Quality store Inc.
The district court and the sixth circuit courts of the appeal concluded that severance payments never amounted to wages under the federal insurance contribution act. This ruling was made despite FICA’s definition of wages broadly incorporating any form of remuneration in employment. This ruling however was made in relation to the code on internal revenue that took a position that severance payments could not amount to wages if they were tied to receipts of state benefit (United States vs Quality stores Inc. et al, 2014).
The ruling went in favor of quality stores Inc. even though severity charges fell were considerable as wages under the federal