5--HIRSH 811-822
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NOTES 811 Tax Lawyer, Vol. 54, No. 4 NOTE THE WAGES OF NOT WORKING: FICA LIABILITY FOR SEVERANCE PAYMENTS IN ASSOCIATED ELECTRIC COOPERATIVE, INC. V. UNITED STATES In Associated Electric Cooperative v. United States, the Federal Circuit held that payments arising under a voluntary severance agreement were wages for employment tax purposes.1 In affirming the decision of the Court of Federal Claims,2 the court found “[t]he payments were designed to replace wages until the employees found other...