Here is a pdf of the Murphy v. IRS case Murphy v. IRS — F.3d — 2006 WL 24113372, D.C. Cir., Aug. 22, 2006 (Slip opinion No. 05-5139).
There has been an AP wire article on this that was carried in the New York TImes see New York Times . Tax Code on Emotional Damages Tossed. August 22, 2006.
Also there wasn at least one commentary in the financial wires on this topic on August 23, see financial blog reaction to Murphy.