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Murphy V. Internal Revenue Service, The Meaning Of 'Income,' And Sky-Is-Falling Tax Commentary, Erik M. Jensen
Murphy V. Internal Revenue Service, The Meaning Of 'Income,' And Sky-Is-Falling Tax Commentary, Erik M. Jensen
Faculty Publications
This article examines the widely noted D.C. Circuit case, Murphy v. Internal Revenue Service, where a panel twice got itself hopelessly entangled in the relationship between the meaning of “income” in the Internal Revenue Code and its meaning in the Sixteenth Amendment. At issue was whether a whistle-blower's recovery for emotional distress could be reached by the income tax. The first time around, the panel concluded that the recovery could not be taxed constitutionally because it was not income. The second time, apparently after having visited another planet, the very same panel concluded that the recovery could be taxed whether …
Deferred Compensation Reform: Taxing The Fruit Of The Tree In Its Proper Season, Eric D. Chason
Deferred Compensation Reform: Taxing The Fruit Of The Tree In Its Proper Season, Eric D. Chason
Faculty Publications
Executive pensions (or deferred compensation) grabbed headlines after Enron's collapse and fresh concerns over ever-increasing executive pay. They also grabbed the attention of Congress, which reformed executive pensions legislatively in 2004 with § 409A of the Internal Revenue Code. Section 409A merely tightens and clarifies the doctrines that had already governed executive pensions, leaving the basic economics of executive pensions unchanged. Executives can still defer taxation on current compensation until actual payment is made in the future. Deferral still comes at the same price to the employer, namely the deferral of its deduction for the compensation expense. Thus, the timing …