The Receipt of Cash for Losses of Personal Rights
5 Pages Posted: 7 Jan 2010
Date Written: January 6, 2010
The D.C. Circuit’s first decision in Marrita Murphy v. IRS, concluding that a recovery for emotional distress was not taxable, received wide criticism. This viewpoint demonstrates that, contrary to conventional wisdom, the IRS before Murphy had a well-developed view that the receipt of cash for loss of a personal right was not a taxable event, regardless of whether any basis recovery or statutory exclusion was involved.
Keywords: Marrita Murphy v. IRS, 460 F.3d 79 (D.C. Cir.), Compensation – Loss of Personal Rights, Taxable Income, Taxation, Accession to Wealth, IRC 104(a)(2)
JEL Classification: K13, K34
Suggested Citation: Suggested Citation