IRS lost another case recently. This time the 6th Circuit Court of Appeals refused to reconsider a 2012 decision that payments made to laid off workers aren’t subject to FICA taxes (Social Security and Medicare payroll taxes). For tax years 2011 and 2012, that’s a tax savings of $56.50 per $1000.00 of compensation per employee, plus the matching payroll savings for their employer. As the IRS estimates refund claims could hit $1 billion, a Supreme Court appeal is likely. Stayed tuned to this issue as you may want to apply for a refund should your employer have withheld FICA on your severance pay when you were laid off.