Tax Legal Services · Primary-source case analysis

Moore: Congress Could Attribute Realized Corporate Income to Shareholders

By Aneeta Mishra and Timothy Chan

Published September 8, 2026

Charles and Kathleen Moore challenged a one-time federal tax on previously undistributed earnings of an American-controlled foreign corporation in which they owned shares.

The corporation had realized income

The foreign corporation earned profits from its business activities. The constitutional issue therefore involved attribution of an entity’s realized income to its owners, not a tax on an unrealized appreciation in the value of property.

Pass-through attribution has deep precedent

Congress long has attributed partnership, S-corporation, and controlled-foreign-corporation income to owners and taxed them on that attributed share, including when the entity did not distribute cash.

The MRT fit that attribution model

The 2017 law attributed specified accumulated earnings of controlled foreign corporations to their United States shareholders. The Court held that Congress could tax those owners on the attributed corporate income under the Sixteenth Amendment.

The holding was expressly narrow

The majority did not decide whether realization is constitutionally required for an income tax or whether Congress may tax wealth, appreciation, or other items not presented. Questions involving attribution beyond entities and owners also remained outside the decision.

Key takeaways

• Identify whose income was realized and to whom Congress attributes it.
• Distinguish taxation of entity income from taxation of unrealized asset appreciation.
• Do not read Moore as resolving a general wealth-tax question.
• Analyze the applicable pass-through and controlled-foreign-corporation provisions before calculating liability.