Charles and Kathleen Moore purchased an 11% stake in a foreign company in 2005. They were passive investors .They got no dividends .They never cashed in any of their shares for a profit .

Now 7 years later ;because of provisions of the 2017 Tax Cuts and Jobs Act (TCJA) they owe a hefty sum of $$ in taxes . The provision calls for a so called wealth tax on people who own at least 10% of a company.

The 16th amendment authorizes taxation of income. In the Moore's case there has been no income realized yet.

But the 9th Circus Court ruled in Moore v US that it doesn't matter than they haven't cashed in because the 16th amendment does not define what income means .

20-36122.pdf (uscourts.gov) (https://cdn.ca9.uscourts.gov/datastore/opinions/2022/06/07/20-36122.pdf)


Right now the law only applies to foreign investment .BUT if SCOTUS allows this decision to stand then the same could apply to unrealized income from domestic investments too.

As the dissent wrote

“Divorcing income from realization opens the door to new federal taxes on other types of wealth without the constitutional requirement of apportionment.”

But the 9th Circus Court ruled in Moore v US that it doesn't matter than they haven't cashed in because the 16th amendment does not define what income means .Seems like a pretty lame appeal. Do we now have problems with understanding what "income" is?



Right now the law only applies to foreign investment .BUT if SCOTUS allows this decision to stand then the same could apply to unrealized income from domestic investments too.
Strange (but wonderful) to be living in a day when a common-sense Supreme Court is now a last resort of hope.