Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Wichita Center For Graduate Medical Education, Inc. v. United States

United States Court of Appeals, Tenth Circuit

March 7, 2019

WICHITA CENTER FOR GRADUATE MEDICAL EDUCATION, INC., on behalf of the themselves and all other taxpayers similarly situated, Plaintiff - Appellant,
v.
UNITED STATES OF AMERICA, Defendant-Appellee.

          APPEAL FROM THE UNITED STATES DISTRICT COURT NO. 6:16-CV-01054-JTM-KGG FOR THE DISTRICT OF KANSAS

         Thomas D. Sykes, The Law Offices of Thomas D. Sykes LLC, Lake Forest, Illinois, for Appellant.

          Deborah K. Snyder, Attorney (Richard E. Zuckerman, Principal Deputy Assistant Attorney General, and Richard Farber, Attorney, with her on the brief), Tax Division, Department of Justice, Washington, D.C., for Appellee.

          Before TYMKOVICH, Chief Judge, HOLMES, and PHILLIPS, Circuit Judges.

          TYMKOVICH, CHIEF JUDGE.

         Wichita Center of Graduate Medical Education is a federally qualified charitable organization incorporated under the laws of Kansas. In 2010, the Internal Revenue Service issued a refund to the Center on overpaid taxes along with incorrectly calculated interest on the refund. The IRS then sought repayment of part of the interest. Under the Internal Revenue Code, corporate taxpayers receive a lower refund interest rate than other taxpayers such as individuals or partnerships. 26 U.S.C. § 6621(a)(1). The Center claims it is not a corporation for purposes of this section and it should be entitled to the higher interest rate applicable to non-corporations.

         We affirm the district court's finding that the Center is a corporation and is subject to the lower interest rate. As we explain, the statutory text compels the conclusion that the Center-even though it does not issue stock or generate profit-must be treated as an ordinary corporation for purposes of the refund statute.[1]

         I. Background

         Wichita Center offers training programs for medical students alongside hospital partners. In 2010, after the IRS determined medical students were not subject to FICA taxes, the IRS refunded to the Center prior FICA tax payments in the amount of $5.4 million. In 2012, the IRS also remitted $4.7 million in interest earned on the overpaid FICA taxes to the Center. The IRS later determined it had erroneously repaid the interest at the higher statutory rate and demanded repayment of $2.3 million to account for the difference. The Center complied with the IRS, but then filed the present action in district court seeking recovery of the $2.3 million payment.

         The Center argues as a non-stock, not-for-profit entity, it is not a corporation for purposes of 26 U.S.C. § 6621(a)(1) and thus deserves the higher interest rate. The Center contends the applicable regulations as well as traditional canons of statutory interpretation support this conclusion. This argument is not new-in fact, the same arguments have been made, and rejected, in the Second Circuit, the Sixth Circuit, the Seventh Circuit, and the Court of Federal Claims. The district court in this case agreed with the other circuits, holding that the word corporation is all-encompassing, and therefore includes non-stock, not-for-profit entities.

         II. Analysis

         Wichita Center argues § 6621(a)(1) should be interpreted to allow nonstock, not-for-profit entities to receive a higher overpayment refund rate reserved for individuals and others. The Center argues the text is ambiguous and requires us to look to the statute as a whole as well as other contextual clues to understand the limited applicability of the higher corporate rate.

         Section 6621(a)(1) provides the interest rates applicable to overpayments of taxes, including the employer-portion FICA taxes at issue here. The provision identifies two types of taxpayers-(1) corporations, and (2) all other ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.