June 28, 2023
U.S. Supreme Court will hear case challenging validity of transition tax under IRC Section 965
On 26 June 2023, the U.S. Supreme Court granted the petition of certiorari on the appeal of Charles G. Moore v. United States, 36 F.4th 930 (9th Cir. 2022). In Moore, the taxpayer argues that the transition tax under IRC Section 965 violates the Constitution’s Apportionment Clause and the Due Process Clause of the Fifth Amendment because the transition tax was a direct tax on unrealized income. Shareholders of foreign corporations who were subject to the transition tax under IRC Section 965 should monitor the Moore case and consider whether action is necessary to preserve their ability to take a position similar to the taxpayer in Moore.