General Policies & Procedures: Document Retention Requirements for FICA Purposes

University of Minnesota Medical School (UMMS)
Graduate Medical Education (GME) Administration

Purpose
The University has recently initiated a lawsuit against the United States of America, in which the University contends that the stipends paid to its medical residents for periods after March 31, 2005 are exempt from social security and Medicare (FICA) taxes because the residents qualify as “students” within the meaning of the tax law (despite a new IRS regulation providing to the contrary). As a preliminary to this lawsuit, the University filed claims with the IRS seeking the refund of FICA taxes on the stipends of its residents and fellows (collectively “residents”), paid by both the University and the residents, for the second calendar quarter of 2005. Because the Government did not respond to these claims within six months, the University initiated this lawsuit to seek payment of its claims. Numerous issues could arise in this lawsuit relating to such matters as 1) resident work and training hours, 2) individual resident grades, evaluations, schedules, and all other matters typically kept in the University’s records concerning individual residents, and 3) the structure and content of all of the University’s graduate medical educational programs.

Policy
The purpose of this Notice is to inform you that you must preserve all documents, materials and data that may relate to the dispute. This preservation obligation applies to all forms of information including e-mails and all other electronic data regardless of whether the data has ever been printed on paper. This preservation obligation also includes correspondence, handwritten notes, draft documents, calendar entries and recordings, whether stored in your office, home or elsewhere. This preservation obligation applies to all documents bearing upon residency program operations after March 31, 2005, including documents created both before and after that date and documents created both before and after the present date. This preservation obligation supersedes normal University documentation retention policies and will remain in effect until the dispute with the Government is resolved. In the meantime, you may not under any circumstances destroy any documents that may relate to the dispute.

The University Office of the General Counsel (OGC) may contact you in the future to collect information in your possession. In the meantime, please contact William Donohue at the OGC at 612/624-7569 if you have any questions concerning this process.