Moore v. United States
Supreme Court of the United States
Full case nameCharles G. Moore, et ux. v. United States
Docket no.22-800
ArgumentOral argument
Questions presented
Whether the Sixteenth Amendment authorizes Congress to tax unrealized sums without apportionment among the states.

Moore v. United States (Docket 22–800) is a pending United States Supreme Court case related to the ability of the federal government to tax unrealized gains as income.

Background

Charles and Kathleen Moore invested $40,000 in an Indian business named KisanKraft in 2005, in exchange for 11% of the company's equity. KisanKraft is a controlled foreign corporation. The company has made a profit every year of its existence, and rather than distributing its earnings to shareholders, it has reinvested profits in the business. Prior to the passage of the Tax Cuts and Jobs Act in 2017, income tax on such earnings generally did not have to be paid until they were distributed to shareholders. The 2017 law changed the corporate and Subpart F tax regime to focus on domestic profits, and imposed a one-time mandatory repatriation tax on profits held overseas. The Moores paid the $14,729 in tax owed and challenged the law in the United States District Court for the Western District of Washington as violating the Sixteenth Amendment's requirement that income be realized before it can be taxed, as set forth in Eisner v. Macomber (1920). The district court ruled for the government, and the United States Court of Appeals for the Ninth Circuit affirmed. Judge Patrick J. Bumatay, joined by three other judges, dissented from the denial of rehearing en banc.

Supreme Court

The Moores filed a petition for a writ of certiorari on February 21, 2023. The Supreme Court granted certiorari on June 26, 2023.[1]

In the summer of 2023, Justice Samuel Alito was interviewed for The Wall Street Journal by David B. Rivkin, an attorney in this case.[2] After publication, Senator Dick Durbin wrote to Chief Justice John Roberts, expressing his opinion that the court should "take appropriate steps" to ensure Alito's recusal from this case.[3] In an order list released on September 8, 2023,[4] Alito rejected Durbin's accusation that his verdict would be swayed by his contact with Rivkin, and he refused to recuse himself.[5]

References

  1. ↑ Howe, Amy (June 26, 2023). "Justices take up cases on veterans' education benefits and 16th Amendment". SCOTUSblog. Retrieved June 27, 2023.
  2. ↑ Schonfeld, Zach (August 31, 2023). "Thomas, Alito go on the attack over Supreme Court ethics". The Hill. Retrieved December 5, 2023.
  3. ↑ Schonfeld, Zach (September 8, 2023). "Alito rejects calls to recuse from tax case after Wall Street Journal interviews". The Hill. Retrieved September 8, 2023.
  4. ↑ "Order List (09/08/2023)" (PDF). Supreme Court of the United States.
  5. ↑ Chung, Andrew (September 8, 2023). "US Supreme Court's Alito rejects recusal in tax case". Reuters. Retrieved September 8, 2023.
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