Moore v. United States
In brief
Congress may tax American shareholders on their shares of a controlled foreign corporation's realized, undistributed income under the Mandatory Repatriation Tax.
- Where it stands
- Decided
Decided 7-2 · June 20, 2024 · Opinion by Justice Kavanaugh
- What it’s about
- This case challenged the constitutionality of the Mandatory Repatriation Tax, a one-time tax on the accumulated, undistributed earnings of foreign corporations controlled by American shareholders.
- Who it affects
- The decision preserves Congress's ability to attribute a corporation's realized income to its shareholders for tax purposes. It affects American shareholders of controlled foreign corporations with accumulated, undistributed earnings.
Summary: written with AI from the case record.
What it's about
The Court upheld the tax, ruling that Congress has the constitutional authority to attribute an entity's realized and undistributed income to its shareholders and tax them on that income.
The case addressed the Sixteenth Amendment's limits on federal taxes tied to income that a taxpayer has not personally received.
Question presented
Does the 16th Amendment authorize Congress to tax unrealized sums without apportionment among the states?
What the Court decided
Holding
The MRT—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. 36 F. 4th 930, affirmed.
- Result
- Affirmed
The vote
- Joined the judgment
- Concurred in a separate opinion
- Dissented
- Wrote an opinion
From the opinions
“The MRT—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.”
What's next
The decision is final, and the Mandatory Repatriation Tax remains in force. Lower courts and tax authorities must apply the Court's conclusion that this tax is within Congress's constitutional authority.
Docket activity
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More questions
- What did the Supreme Court rule in Moore v. United States?
- The Court upheld the Mandatory Repatriation Tax and affirmed the Ninth Circuit. It said the tax does not exceed Congress's constitutional authority.
- Who won Moore v. United States?
- The United States won. The Court rejected the constitutional challenge to the Mandatory Repatriation Tax by a 7-2 vote.
- What does Moore v. United States mean for American shareholders of foreign corporations?
- American shareholders may be taxed on their portions of a controlled foreign corporation's realized, undistributed income. The tax does not require the corporation to distribute that income first.
- Is the Mandatory Repatriation Tax still the law after Moore v. United States?
- Yes. The Supreme Court upheld the tax and affirmed the Ninth Circuit's judgment.
- What happens next after Moore v. United States?
- Tax authorities and lower courts apply the decision. Affected shareholders remain subject to the Mandatory Repatriation Tax as upheld by the Court.
Sources
Primary materials plus reporting. Best-effort analysis: this explainer relies on a mix of primary materials and trusted secondary sources. Official filings and opinions remain authoritative.