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Supreme Court weighs whether 'income' under the 16th Amendment requires realization in Moore v. United States
Summary
At oral argument in Moore v. United States the Court debated whether the Sixteenth Amendment’s concept of “income” requires a realization event and whether the MRT — a pass-through tax on undistributed corporate earnings — may be attributed to shareholders, with justices probing broad consequences for tax law.
The Supreme Court on oral argument considered whether the Sixteenth Amendment’s reference to “income” requires a realization event and whether Congress may attribute realized corporate earnings to shareholders under the MRT. Petitioners’ counsel, arguing for a realization requirement, told the bench that “the word income is not an inkblot,” and pressed that unrealized appreciation and mere ownership are not income subject to an unapportioned tax.
Government counsel defended the MRT as rooted in text and historical practice, saying the statute operates as a pass‑through tax on earnings the foreign corporation realized and that Congress has long attributed such corporate…
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