Tax News Update    Email this document    Print this document  

June 7, 2022
2022-0889

Ninth Circuit affirms dismissal of constitutional challenge to Mandatory Repatriation Tax under subpart F

The Ninth Circuit has affirmed (Charles G. Moore, et ux. v. United States) a district court's dismissal of a challenge to the Mandatory Repatriation Tax (MRT) as unconstitutional. Added by the Tax Cuts and Jobs Act of 2017, the MRT modified subpart F by classifying earnings of controlled foreign corporations (CFCs) after 1986 as taxable in 2017, thus taxing US taxpayers who own at least 10% of a CFC on the CFC's profits after 1986, even if the distributions were not distributed. The appeals court held the MRT is consistent with the Apportionment Clause and does not violate the Due Process Clause.

 

The information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting or tax advice or opinion provided by Ernst & Young LLP to the reader. The reader also is cautioned that this material may not be applicable to, or suitable for, the reader's specific circumstances or needs, and may require consideration of non-tax and other tax factors if any action is to be contemplated. The reader should contact his or her Ernst & Young LLP or other tax professional prior to taking any action based upon this information. Ernst & Young LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.

 

Copyright © 1996 – 2024, Ernst & Young LLP

 

All rights reserved. No part of this document may be reproduced, retransmitted or otherwise redistributed in any form or by any means, electronic or mechanical, including by photocopying, facsimile transmission, recording, rekeying, or using any information storage and retrieval system, without written permission from Ernst & Young LLP.

 

EY US Tax News Update Master Agreement | EY Privacy Statement