Thanks to Paul Caron of the TaxProf Blog for letting us know that the D.C. Circuit has vacated the Murphy decision. The Murphy case was the one that said that the 16th Amendment made unconstitutional taxes on the recovery of a non-physical personal injury not related to lost wages or earnings (§104(a)(2) of the Internal Revenue Code). That decision was generally criticized at the time it was issued.
So the same panel will look at the issue again in early 2007. We’ll see if they come up with the same answer or not. In the meantime, the government’s request for an en banc panel of the entire D.C. Circuit was thrown out as moot. However, expect appeals no matter which side wins at next year’s rehearing.
There’s a complete set of links available at the TaxProf Blog.
Tags: Murphy