Supreme Court Rejects Challenge to Tax Law on Foreign Investments

Video Credit: Wibbitz Top Stories
Published on June 20, 2024 - Duration: 01:30s

Supreme Court Rejects Challenge to Tax Law on Foreign Investments

Supreme Court Rejects , Challenge to Tax Law on, Foreign Investments.

On June 20, the Supreme Court upheld a tax on foreign corporate investments enacted by a Republican-controlled Congress under former President Donald Trump.

On June 20, the Supreme Court upheld a tax on foreign corporate investments enacted by a Republican-controlled Congress under former President Donald Trump.

NBC reports that the case had attracted scrutiny when conservative Justice Samuel Alito refused to recuse himself despite ties with one of the challenging lawyers.

The case revolved around whether an individual can be forced to pay taxes on investments in foreign-owned companies regardless of if they were a source of income.

The case revolved around whether an individual can be forced to pay taxes on investments in foreign-owned companies regardless of if they were a source of income.

According to the 16th Amendment of the Constitution, Congress has the power to "collect taxes on incomes.".

In the case, Charles and Kathleen Moore claim they were unfairly taxed on their $40,000 investment in an India-based company called KisanKraft Machine Tools.

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While the company made a profit, the Moores claim that they received no dividends and that the money was reinvested in the business.

As a result, the Moores did not pay taxes between 2006 and 2017 on what the U.S. government later defined as income from their investment.

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Due to a provision that was part of a major tax law enacted by former President Donald Trump in 2017, the Moores paid $15,000 in additional taxes.

They later sought a refund for that payment, arguing that they had been unlawfully taxed based on an increase in the value of a capital investment not qualifying as income.

The couple's challenge was rejected by the Supreme Court 7-2


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