Mayo Foundation v. United States
| Mayo Foundation for Medical Education and Research, et al. v. United States | |
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| Argued November 8, 2010 Decided January 11, 2011 |
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| Full case name | Mayo Foundation for Medical Education and Research; Mayo Clinic; and Regents of the University of Minnesota v. United States |
| Docket nos. | 09-837 |
| Citations | 562 U.S. 44 (more)
131 S.Ct. 704, 178 L.Ed.2d 588, 2011 WL 66433
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| Prior history | Judgment for plaintiffs 503 F.Supp.2d 1164; (D. Minn., 2007; Mayo Foundation for Medical Education and Research v. United States), Regents of the University of Minnesota v. United States 2008 WL 906799 (D. Minn., 2008); both reversed 568 F.3d 675 (8th Cir., 2009); certiorari granted 560 U.S. ___ (2010) |
| Holding | |
| The Treasury Department's regulation, 26 C.F.R §31.3121(b)(10)– 2(d)(3)(iii), providing that student employees working at least full-time are categorically ineligible for the student exemption from Social Security taxes codified at 26 U.S.C. §3121(b)(10), is a reasonable construction of that statute. Eighth Circuit affirmed. | |
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| Case opinions | |
| Majority | Roberts, joined by Scalia, Kennedy, Thomas, Ginsburg, Breyer, Alito, Sotomayor |
| Kagan took no part in the consideration or decision of the case. | |
| Laws applied | |
| 26 U.S.C. § §3121(b)(10) (Federal Insurance Contributions Act); 26 C.F.R §31.3121(b)(10)– 2(d)(3)(iii) | |
Mayo Foundation v. United States, 562 U.S. 44 (2011), is a United States Supreme Court case in which the Court upheld a Treasury Department regulation on the grounds that the courts should defer to government agencies in tax cases in absence of an unreasonable decision on the part of the agency.
Under the Federal Insurance Contributions Act (FICA), students and their educational employers are exempted from paying Social Security taxes. The Treasury Department issued a regulation in 2004, declaring those who worked more than 40 hours a week were ineligible for such an exemption. The Mayo Foundation filed suit to challenge the regulation and for a refund of the taxes it had paid on its medical residents—recently graduated physicians who work more than full-time providing patient care, but who are still considered trainees by the medical profession. The District Court ruled for the Mayo Foundation and struck the regulation, but was reversed by the Court of Appeals.
The Supreme Court ruled unanimously to uphold the regulation as within the Treasury Department's statutory authority to issue and as a reasonable construction of FICA. The Court clarified that the deferential standard of Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc. (1984) applied, notwithstanding prior Court rulings that had adopted a more stringent standard to tax regulations. Applying Chevron, the Court first found that Congress had left the matter to the agency because the statute was silent on the definition of "student" and its applicability to medical residents specifically. Second, the Court found that the regulation was a reasonable interpretation of the statute, and that its clear line helped distinguish workers who study and students who work, simplified enforcement, and furthered the broad coverage of Social Security.
In the first decade of the 21st century, the vast majority of medical residents in the United States were physicians who had recently graduated from a medical school in the United States. While graduating from a medical school provides an individual with a medical degree, a state medical license is required to practice medicine. All states require that an individual pass Step 3 of the USMLE or COMLEX exams and complete at least one year of residency training to obtain an unrestricted medical license; in practice, most practicing physicians complete their multiyear residency. While training, residents practice medicine with considerable autonomy under the supervision of attending physicians.
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