In the case of District of Columbia v. Murphy in 1941, the United States Supreme Court ruled on a dispute involving tax law and jurisdictional boundaries. The respondent, Mr. Murphy, was a resident of Virginia who worked for the federal government in Washington D.C., where he also maintained an office at his home address in Virginia. He claimed that under Section 12(a) of Title IV Revenue Act (1939), his income should not be subject to taxation by D.C because it was sourced from outside its territorial limits i.e., Virginia. The court disagreed with this argument and held that since Mr. Murphy's salary came from services performed within the District of Columbia as part of his employment with the federal government there, it could indeed be taxed by D.C despite him residing elsewhere. This decision clarified how income sourcing rules apply to individuals working across state lines or jurisdictions - essentially establishing that taxes can be levied based on where work is performed rather than solely where one resides.

In the dissenting opinion for District of Columbia v. Murphy, 1941, Justice Frankfurter argued that the court's decision to uphold a lower court ruling in favor of Murphy was incorrect. He believed that the case should have been dismissed on jurisdictional grounds because it involved an internal dispute within a federal agency and thus did not constitute a "case or controversy" as required by Article III of the Constitution. Furthermore, he contended that even if there were jurisdiction, Murphy had failed to exhaust his administrative remedies before seeking judicial review. Finally, he disagreed with the majority's interpretation of civil service laws and regulations regarding employee dismissals; according to him these rules gave broad discretion to agency heads and did not require them to provide specific reasons for their decisions.