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Mayo Foundation v. United States

Case Date: 11/08/2010
Docket No: none

Facts of the Case 

The Mayo Foundation for Medical Education and Research ("Mayo") and the University of Minnesota ("University") sued the United States in a Minnesota federal district court seeking a refund for taxes paid under the Federal Insurance Contributions Act ("FICA"). They argued that payments made to doctors in their residency qualify for FICA's student exemption. The district court agreed and awarded judgment in favor of Mayo and the University.

On appeal, the U.S. Court of Appeals for the Eighth Circuit reversed, holding that the residents in this case did not qualify for the FICA exemption. The court reasoned that Treasury Regulation 26 U.S.C. § 3121(b)(10) excludes "full-time employees" from the FICA student exemption. Here, the resident doctors were full-time employees and, therefore, were excluded from the FICA exemption.

Read the Briefs for this Case
  • Brief for Amici Curiae Association of American Medical Colleges, American Council On Education, Association of American Universities, Association of Public And Land-grant Universities, American Osteopathic Association, And American Association of Colleges
  • Brief for the American Hospital Association as Amicus Curiae In Support of Petitioners
  • Brief of the University of Texas System as Amicus Curiae Supporting Petitioner
    • Question 

    Can the Treasury Department categorically exclude all medical residents who meet the FICA definition of student and who would be subject to the FICA student exemption?

    Argument Mayo Foundation v. United States - Oral ArgumentFull Transcript Text  Download MP3Mayo Foundation v. United States - Opinion AnnouncementFull Transcript Text  Download MP3 Conclusion  Decision: 8 votes for United States, 0 vote(s) against Legal provision: 26 U.S.C. § 3121(b)(10)

    Yes. Chief Justice John G. Roberts, Jr. writing for a unanimous Court, upheld the Treasury Department's rule that treats medical residents as full-time employees, and therefore not exempt from the payment of payroll taxes is a valid interpretation of federal law. Justice Elena Kagan did not take part in the decision.