In its case, Mayo Clinic claims the 2005 rule that classifies medical residents as full-time employees, not students, is arbitrary. Mayo argues that residents are students and should be exempt, as other students are, from the tax.
Central to the Clinic’s case is the argument that the primary purpose of residency is educational rather than to earn a living.
Although a decision in the case isn’t expected until June, initial questions from the justices suggest that they seem reluctant to reject the IRS ruling.
Chief Justice John Roberts seemed to support the IRS’ authority to draw the line between a student and an employee, and Justice Sonia Sotomayor, asked, “You don’t think receiving $50,000 or $60,000 a year is enough to make you an employee of someone?” according to the report.
Read the Wall Street Journal report on taxes on medical residents.
Read previous coverage on taxes on medical residents:
– U.S. Supreme Court Agrees to Hear Mayo Clinic Case on Residents’ Pay
– Hospitals, Residents to Receive Millions in Tax Refunds
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