IRS ordered to refund University of Minnesota $1.1 million
MINNEAPOLIS — A judge has ruled that the government improperly levied more than $1 million in taxes on the University of Minnesota for medical residents.
U.S. District Judge Richard Kyle ordered the government Tuesday to repay the university about $1.1 million, plus interest, related to its overpayments of "FICA taxes."
The taxes fund the Social Security system.
FICA excludes services performed for a university by a student attending classes. The IRS changed its rules in 2004 to disqualify full-time medical residents from the exclusion. But in August, Kyle ruled the amended regulations invalid in a case involving the Mayo Foundation.
The government is appealing that ruling.