University of Miami Business Law Review

Document Type



The passing of the Tax Cuts and Jobs Act (“TCJA”) in December 2017 made significant changes that affect both domestic and international businesses income taxes. One of the most notable changes involves the Internal Revenue Code (“IRC”) section 965 transition tax on foreign earnings of foreign subsidiaries of U.S. companies, which deems those earnings to be repatriated. Effectively, this transition tax disregards the realization element thought by some to be a U.S. Constitutional requirement. As such, questions have arisen in the courts regarding the constitutionality of these laws. The most noteworthy case of Moore v. United States has found its way to the steps of the U.S. Supreme Court. Petitioners are asking the U.S. Supreme Court to overturn the Ninth Circuit holding that income realization is not a requirement when upholding the transition tax. The outcome of this case could redefine the term “income” and thus disrupt the entire U.S. income tax code.

The ruling from Moore will greatly affect not only current tax regimes such as Subpart F, GILTI, passthrough tax treatment, but also may have large implications on proposed tax laws such as the mark-to-market tax. Eliminating the realization requirement in the definition of income would effectively eliminate all possibility of the mark-to-market tax, otherwise known as the wealth tax, and quite possibly change all of tax law as we know it.