SCOTUS Series #3: Moore and More

Decisions from two Supreme Court cases may have long-term impact on Americans overseas.

By Fred Einbinder, VP Advocacy, AARO
January 29th, 2025

The U. S. Supreme Court does not often hear cases brought by expatriate Americans about issues that might directly affect them. However, in its 2024 term the Court heard Moore v. United States, dealing with the taxability of unrealized income from a minority investment in an overseas company. The Court decided that the little-know provisions of the “mandatory repatriation tax” in the 2017 Jobs and Tax Cuts Act did apply and tax was owed.

Shortly after Moore was decided, the Supreme Court handed down a landmark decision on Loper Bright Enterprises v. Raimondo, which dramatically reduced the power previously given administrative and executive agencies to interpret Congressional grants of authority and thereby effectively regulate activities within their domains.

Major points from these two cases include:

1. The Supreme Court’s Moore decision was not favorable to the petitioners who had invested in an Indian corporate venture and who later found, to their great surprise, that this investment producing “unrealized income,” led to US tax liability and reporting requirements. However, the Court’s decision was narrow and does not preclude later constitutional challenges to other taxes affecting Americans abroad, notably the “Exit Tax”.
2. Loper Bright is a “landmark” decision in its dramatic reduction of the power of government agencies to interpret and therefore effectively regulate activities in their domain. Loper Bright therefore offers legal (and political) advocacy opportunities to rein in IRS and Treasury actions, such as the imposition of disproportionately high informational reporting penalties and obtain greater clarity and ‘fair notice’ of tax and financial reporting requirements in general.

AARO Analyzes Both Cases

As part of its continuing series discussing Supreme Court cases of particular interest to AARO members, AARO has prepared Moore and More…, a summary and analysis of both the Moore and Loper Bright cases.

You can also find our previous analyses of Supreme Court cases:

• SCOTUS Series #2: The Supreme Court’s Favorable Decision in the Bittner FBAR Case
• SCOTUS Series #1: The Bittner FBAR Case

Other Developments

Since Moore and Loper Bright, several other lawsuits have been filed and decisions appealed of special pertinence to Americans abroad, including penalties for alleged compliance omissions in gift reporting and passport non-renewals or revocations.

The Taxpayer Advocate Service (TAS), an independent sub-agency within the IRS, had recent success in influencing the IRS to change policy in a manner favorable to Americans abroad in relation to informational reporting compliance and penalty procedures is a welcome development which AARO will build on in its promotion of more substantial reforms.

AARO Advocacy Continues

The AARO advocacy team has closely followed all these developments and shared its reflections on strategy with AARO members and their consultants and expert professional and academic “influencers” in the field. We encourage members to contact us with questions and concerns about legislation and regulations which affect Americans abroad.

Read more: SCOTUS Series #3: Moore and More