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1 1 (January 8, 2024)

handle is hein.crs/govenxn0001 and id is 1 raw text is: SCongressional ______ ~ ~Research Service Supreme Court Considers Scope of Congress's Sixteenth Amendment Income Taxing Power in Moore v. United States January 8, 2024 On December 9, 2023, the Supreme Court heard oral argument in Moore v. United States, an appeal challenging a one-time Mandatory Repatriation Tax (MRT) on U.S. shareholders of a foreign corporation for accumulated, but undistributed, earnings of the corporation. The taxpayers ask the Court to invalidate the MRT as a tax on unrealized income because the Sixteenth Amendment, they argue, has a realization requirement, meaning that the taxpayer must receive or enjoy an economic gain for earnings to qualify as income. The government argues that the Sixteenth Amendment contains no such realization requirement and that other taxes Congress has enacted would be invalidated should the Court agree with the taxpayers' interpretation. Moore has attracted attention from Congress, tax law practioners, and the general public over how a broad ruling from the Court could expand or constrain Congress's power to tax income under the Sixteenth Amendment. This Legal Sidebar provides an overview of the constitutional jurisprudence at issue in this case, as well as a discussion of the specific facts and arguments raised in Moore, including the Justices' questioning at oral argument. It also highlights concerns the case has generated. The Sidebar concludes by discussing the potential implications of Moore for Congress. Legal Background Article I, Section 8, Clause 1 of the U.S. Constitution authorizes Congress [t]o lay and collect Taxes, Duties, Imposts and Excises. Section 2, Clause 3 and Section 9, Clause 4 of Article I limit this power, however, so that direct Taxes shall be apportioned among the several States which may be included within this Union, according to their respective Numbers and [n]o Capitation, or other direct, Tax shall be laid, unless in Proportion to the Census. Thus, under the rule of apportionment applicable to direct taxes, amounts raised by a direct tax must be divided among the states according to each state's population. Congressional Research Service https://crsreports.congress.gov LSB11100 CRS Legal Sidebar Prepared for Members and Committees of Congress

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