Oral Argument: Moore v. United States | Case No. 22-800 | Date Argued: 12/5/23 | Date Decided: 6/20/24

Link to Docket: Here.

Background:

Beginning with Eisner v. Macomber, 252 U.S. 189 (1920), this Court's decisions have uniformly held "income," for Sixteenth Amendment purposes, to require realization by the taxpayer. In the decision below, however, the Ninth Circuit approved taxation of a married couple on earnings that they undisputedly did not realize but were instead retained and reinvested by a corporation in which they are minority shareholders. It held that "realization of income is not a constitutional requirement" for Congress to lay an "income" tax exempt from apportionment. App.12. In so holding, the Ninth Circuit became "the first court in the country to state that an 'income tax' doesn't require that a 'taxpayer has realized income.'" App.38 (Bumatay, J., dissenting from denial of rehearing en banc).

Question Presented: Whether the Sixteenth Amendment authorizes Congress to tax unrealized sums without apportionment among the states.

Holding: The Mandatory Repatriation Tax, "which attributes the realized and undistributed income of an American-controlled foreign corporation to the entity's American shareholders, and then taxes the American shareholders on their portions of that income" does not exceed Congress's constitutional authority.

Result: Affirmed.

Voting Breakdown: 7-2. Justice Kavanaugh delivered the opinion of the Court, in which Chief Justice Roberts and Justices Sotomayor, Kagan, and Jackson joined. Justice Jackson filed a concurring opinion. Justice Barrett filed an opinion concurring in the judgment, in which Justice Alito joined. Justice Thomas filed a dissenting opinion, in which Justice Gorsuch joined.

Link to Opinion: Here.

Oral Advocates:

• For Petitioner: Andrew M. Grossman, Washington, D.C.
• For Respondent: Elizabeth B. Prelogar, Solicitor General, Department of Justice, Washington, D.C.