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Supreme Court to rule on tax exemption for medical residents

The US Supreme Court [official website; JURIST news archive] on Tuesday granted certiorari [order list, PDF] in Mayo Foundation for Medical Education and Research v. United States [docket; cert. petition, PDF] to decide whether medical students working as full-time residents are eligible for the student exception to Federal Insurance Contributions Act (FICA) [text] taxes imposed on employers and employees. Medical students working for the Mayo Clinic in Rochester, Minnesota, receive stipends from the foundation and the University of Minnesota [academic websites] for the medical and patient care services they provide. The district court ruled that residents qualify for the exemption and ordered the US Treasury Department [official website] to refund FICA taxes paid during the second quarter of 2005 to both Mayo and the university. The US government appealed to the US Court of Appeals for the Eighth Circuit, which reviewed the case de novo. The circuit court reversed [opinion, PDF] the lower court's holding, concluding that the judiciary must "defer to the regulation limiting this exception to students who are not full-time employees because it is a permissible interpretation of the statute."

Also Tuesday, the court released an order in McComish v. Bennett [order, PDF], refusing to vacate a Ninth Circuit opinion upholding an Arizona campaign finance provision, but the Supreme Court will allow the parties to renew the application in the case if they indicate that they intend to file a timely petition for certiorari. The Arizona law under review is a "matching funds" provision of the Arizona Citizens Clean Elections Act [official website], which allows Arizona to provide public financing to candidates for state political offices. A candidate who chooses to participate in the act's voluntary public financing scheme relinquishes her or his right to raise private campaign contributions.

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