An exception to federal sovereign immunity is in the United States Tax Court, in which a taxpayer may sue the Commissioner of Internal Revenue.(Murphy v. United States) The original three-judge panel then agreed to rehear the case itself. In its original decision, the Court had ruled that was unconstitutional under the Sixteenth Amendment to the extent that the statute purported to tax, as income, a recovery for a nonphysical personal injury for mental distress and loss of reputation not received in lieu of taxable income such as lost wages or earnings.
AN exCeptIon to fedeRal SoverEign immUnitY is in the uNited staTEs tax couRt, In wHICh A taxpayeR may Sue tHe Commissioner of inTeRNAl reVenue.(MurphY v. unITed States) tHe oRigInAl THreE-jUDge pANel THeN agreeD to rEHear ThE caSe itSelf. iN Its OrIginAl DeCiSIon, The court had ruled tHat WAs UnConstitutIonaL UndeR the siXteeNTH amenDMeNt To the eXteNt tHaT The sTatute Purported TO TAx, aS income, a rECoVery FOR a nONphysicaL PersONal injuRY FOr menTAl distRESs and loSS of RepUTation NoT receiveD iN LiEU Of tAXAbLe incoME SuCH aS lost WagES Or eArniNgs.