Tuesday, January 18, 2011
Following up on last week's commentary on the Supreme Court's unanimous opinion in Mayo Foundation for Medical Education & Research v. United States
, No. 09-837 (Jan. 11, 2011):
Thomas Greenaway (KPMG, Boston), Mayo Foundation Cures Tax Myopia:
Last week, the U.S. Supreme Court unanimously decided an important tax case, holding that full-time medical residents are not “students” exempt from FICA taxes. More broadly, Chief Justice Roberts, writing for the Court, cured decades of “tax myopia”[Fn.1] with hsi reasoning. Tax myopia afflicts practitioners who cannot see beyond the self-contained world of tax. In short, the Court concluded that the Chevron two-step approach applies to all ambiguous Code provisions subject to interpretation by Treasury regulations. This decision was a long time coming. The case cuts against taxpayers who take positions contrary to regulations, but the broader implications of the decision are harder to see at this point.
Fn. 1: See Paul Caron, Tax Myopia, or Mamas Don’t Let Your Babies Grow Up to Be Tax Lawyers, 13 Va. Tax. Rev. 517 (1994).