The Justice Department wants the Detroit Medical Center, which manages 10 hospitals in southeast Michigan, to repay $15.8 million in payroll taxes that was refunded by the Internal Revenue Service.
The claim in a Justice Department lawsuit, filed Friday in U.S. District Court in Detroit, dates back to 2003, when the DMC paid Social Security payroll taxes on behalf of medical residents, the Detroit News reported.
In May 2004, the DMC sought a refund of the taxes, claiming the money it gives residents isn't a taxable salary but untaxable scholarship grants. The IRS granted the refund but now claims that was a mistake.
DMC spokeswoman Sue Capatina said the center wouldn't comment on a suit it hadn't seen.