A group of medical residents’ action against their healthcare employer seeking damages for its failure to seek withholding tax refunds was properly dismissed. The residents sought a refund of taxes and had failed to exhaust their administrative remedies. The employer had a reasonable belief that it was required to withhold FICA taxes from the residents’ pay and there was no allegation that the employer gave away something it did not possess. Further, the damages sought were equivalent to the FICA taxes withheld. Thus, the residents’ were essentially seeking a tax refund, not charging that the employer committed an independent wrong. Since the residents were seeking a refund, they were required by Code Sec. 7422 to file an administrative refund claim with the IRS before filing suit. (M. Chalfin, M.D. v. St. Joseph’s Healthcare System, CA-3, 2015-2 ustc ¶50,525.)
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