Abstract
The increase of full-time faculty members working past traditional retirement age is causing concern among America's colleges and universities. Due to the current economic situation, universities will continue to induce their older, higher-paid faculty members to retire to reduce costs. Currently, there is a split among circuit courts regarding whether Federal Insurance Contributions Act ("FICA") taxation is applicable to early retirement payments made to induce tenured college faculty to retire. This comment examines the implications of subjecting such early retirement payments to FICA taxation. It explores the background of tenure rights and FICA tax generally as well as the position taken by the IRS and the development of case law. The comment proposes that rather than employing an all-or-nothing approach that produces inherently unfair results, a more favorable threshold approach should be utilized that makes concessions to all those involved. Finally, the comment explains why this approach is the most desirable outcome for both taxpayers and the IRS.
Recommended Citation
Carson Maricle,
Early Retirement Payments Under Tenure And FICA Taxes: Transfer of a Property Right or Just Another Payday?,
34
S. Ill. U. L.J.
727
(2010).
Available at:
https://opensiuc.lib.siu.edu/siulj/vol34/iss3/7