Moore v. United States
Moore v. United States
Moore v. United States
22-800
QUESTION PRESENTED
Whether Congress may levy income tax on a tax-
payer who has not realized income.
ii
TABLE OF CONTENTS
TABLE OF AUTHORITES
Cases
Analog Devices v. Comm’r, 147 T.C. 429, 437
(2016) ...................................................................... 13
Comm'r v. Glenshaw Glass, 348 U.S. 426
(1955) ...................................................................... 11
Cottage Sav. Ass'n v. Comm'r, 499 U.S. 554
(1991) ...................................................................... 12
Dave Fischbein Mfg. Co. v. Comm’r, 59 T.C.
338 (1972) ................................................................. 4
Dougherty v. Comm’r, 60 T.C. 917 (1973) ................... 5
Edwards v. Cuba R. Co., 268 U.S. 628 (1925) ............ 7
Eisner v. Macomber, 252 U.S. 189 (1920) ......... 8, 9, 10
Garlock Inc. v. Comm’r, 489 F.2d 197 (2d Cir.
1973) ....................................................................... 14
Helvering v. Horst, 311 U.S. 112 (1940).............. 10, 12
Merchants’ Loan & Tr. Co. v. Smietanka, 255
U.S. 509 (1921) ....................................................... 16
United States v. Safety Car Heating &
Lighting Co., 297 U.S. 88 (1936) ........................... 16
Whitlock’s Est. v. Comm’r, 59 T.C. 490 (1972) .......... 14
Statutes
American Jobs Creation Act of 2004, Pub. L.
No. 108-357, § 422(a), 118 Stat. at 1514-
1515 ........................................................................ 13
I.R.C § 951 .................................................................. 14
I.R.C. § 61 ..................................................................... 7
I.R.C. § 951 ................................................................... 5
iv
ARGUMENT
I. The Mandatory Repatriation Tax Was
Unprecedented in U.S. Tax Law.
The 2017 Tax Cuts and Jobs Act (TCJA) was the
most wide-ranging change in federal tax law since the
Tax Reform Act of 1986. Part of the TCJA’s transfor-
mation of the U.S. international tax system was the
imposition of a one-time Mandatory Repatriation Tax.
See I.R.C. § 965.
To understand the Mandatory Repatriation Tax, it
is necessary to first understand some fundamental fea-
tures of the general structure of U.S. international tax
law before the enactment of the TCJA. Before the
TCJA, the income of a foreign corporation was gener-
ally not subject to U.S. taxation unless and until that
income was distributed to U.S. taxpayers. See, e.g.,
Dave Fischbein Mfg. Co. v. Comm’r, 59 T.C. 338, 353
(1972). Accordingly, U.S. taxpayers would only incur
taxes on the earnings of a foreign corporation when the
U.S. taxpayers realized income through distribution
(or “repatriation”), such as through dividend pay-
ments. This treatment was consistent with the general
principle that a taxpayer is not subject to income tax
until the taxpayer realizes income.
Congress enacted the principal exception to this
general rule through the regime known as Subpart F.
Subpart F, enacted in 1962, singles out a specific class
of U.S. taxpayers who own shares in foreign corpora-
tions (U.S. Shareholders). U.S. Shareholders are de-
fined as U.S. persons (including entities) who own at
least 10% of the shares of a foreign corporation and
who collectively own more than 50% of the shares of
such corporation (known as a controlled foreign
5
5 Available at https://www.merriam-webster.com/diction-
ary/income (last visited Mar. 18, 2023).
9
CONCLUSION
For the foregoing reasons, and those described by
the Petitioner, this Court should grant the petition.