Document ID: ./input/supremecourt_opinions/opinions/13pdf/12-1408_6468.pdf
Page Number: 16.0

Cite as:  572 U. S. ____ (2014) 

13 

Opinion of the Court 

meaning of the term “wages” in §3401.  The better reading 
is  that  Congress  determined  that,  whatever  position  the 
IRS  took  with  respect  to  certain  categories  of  severance
payments, the problem with withholding should be solved
by  treating  all  severance  payments  as  wages  requiring 
withholding.

The necessary conclusion is that  §3402(o) does not nar-
row the term “wages” under FICA to exempt all severance 
payments.  This  reasoning  is  consistent  with  Rowan,  a 
previous decision interpreting FICA.  In Rowan, the Court 
held  that  Treasury  Regulations  interpreting  “wages”un-
der  FICA  to  include  the  value  of  meals  and  lodging  were
invalid.  The  Government  conceded,  for  income-tax  pur-
poses,  that  the  taxpayer  in  Rowan  was  correct  to  exempt
the value of the meals and lodging in computing the wages 
properly  withheld  under  §3402.    452  U. S.,  at  250–251. 
But  it  argued,  nevertheless,  that  the  value  of  the  meals 
and  lodging  was  taxable  as  wages  under  FICA,  pursuant 
to Treasury Regulations.  The Rowan Court observed that 
the  definition  of  wages  under  FICA  was  in  substance  the
same  as  for  purposes  of  withholding.  Id.,  at  255.    The 
Court  read  that  similarity  to  be  “strong  evidence  that
Congress  intended  ‘wages’  to  mean  the  same  thing  under
FICA . . .  and  income-tax  withholding.”    Ibid.    To  support
that  conclusion,  the  Court  noted  a  “congressional  concern
for ‘the interest of simplicity and ease of administration.’ ” 
Ibid. (quoting S. Rep.  No. 1631, 77th Cong.,  2d Sess., 165 
(1942)).  Because “Congress intended . . . to coordinate the
income-tax  withholding  system  with  FICA”  in  order  “to  
promote simplicity and ease of administration,” the Court 
held  that  it  would  be  “extraordinary”  for  Congress  to
intend  the  definitions  of  “wages”  to  vary  between  FICA
and income-tax withholding.  452 U. S., at 257. 

The specific holding of Rowan—that regulations govern-
ing  meals  and  lodging  were  invalid—has  little  or  no 
bearing  on  the  issue  confronting  us  here.    What  is  of  im-