United States v. Fior D'Italia, Inc., 536 U.S. 238, 9 (2002)

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Opinion of the Court

And there is simply no reason to believe that Congress intended any such limitation.

Section 6205(a)(1) refers to certain employment taxes, including FICA taxes, and says that when an employer initially pays "less than the correct amount of tax," then "proper adjustments . . . shall be made, without interest," in accordance with "regulations." The IRS has made clear that this provision refers to an employer's "adjustments," say, in an initially underreported tax liability, made before the IRS has assessed an underpayment. See generally 26 CFR 31.6205-1 (2001). Again, there is simply no reason to believe that Congress, in writing this provision applicable to a small corner of tax law, intended, through negative implication, to limit the IRS' general power to assess tax deficiencies. Indeed, Fior D'Italia has not advanced in this Court either "negative implication" argument relied on by the Ninth Circuit.


Fior D'Italia next points to several features of an "aggre-gate" estimate that, in its view, make it "unreasonable" (and therefore contrary to law) for the IRS to use that method. First, it notes that an aggregate estimate will sometimes include tips that should not count in calculating the FICA tax the employer owes. The law excludes an employee's tips from the FICA wages base insofar as those tips amount to less than $20 in a month. 26 U. S. C. 3121(a)(12)(B). It also excludes the portion of tips and other wages (including fixed salary) an employee receives that rises above a certain annual level—$53,400 in 1991 and $55,500 in 1992. 3121(a)(1); 242 F. 3d, at 846, n. 4. These ceilings mean that if a waiter earns, say, $36,000 in fixed salary, reports $20,000 in tips, and fails to report $10,000 in tips, the restaurant would not owe additional taxes, because the waiter's reported income ($56,000) already exceeds the FICA ceiling. But if that waiter earns $36,000 in fixed salary, reports $10,000 in tips, and fails to report another $10,000 in tips,

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