The National Whistleblower Center announced today that a major Whistleblower/Civil Rights tax case has been filed with the Supreme Court. The case, Murphy v. IRS, has generated a lot of attention in the past year, and certainly puts forth questions that beg a grant of certiorari.

At the heart of the case is whether the IRS has the constitutional right to tax plaintiffs’ court awards for non-physical compensatory damages, such as emotional distress and loss of reputation.  

The case was brought by Marrita Murphy, an environmental whistleblower who won her case before the Department of Labor, and was awarded compensatory damages to vindicate her rights under six federal environmental whistleblower statutes. Murphy filed suit when that IRS demanded that she pay taxes on the "make-whole" award.

Murphy v. IRS has the potential to affect thousands of past and future victims of civil rights violations and whistleblower retaliation.


UPDATE 1/16/08: To see the latest on Murphy v. IRS, click here 

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