On Tuesday, the Court heard oral arguments in U.S. v. Quality Stores, Inc. (SCOTUSblog case page here). According to the government's brief, the issue presented is:
Whether severance payments made to employees whose employment was involuntarily terminated are taxable under the Federal Insurance Contributions Act, 26 U.S.C. 3101 et seq.You can read the full transcript here (audio should be up here by Friday afternoon). According to Bradley Joondeph on SCOTUSblog, the smart money is on the government. We'll probably have to wait a few months for the formal decision.