WASHINGTON (AP) — Charles and Kathleen Moore are about to have that day. supreme court They claim the $15,000 tax bill is unconstitutional.
The couple, who live in Redmond, Wash., claim they had to pay out the money because they had invested in an Indian company, but Charles Moore, 62, said in a sworn statement that he had not received any distributions or dividends. “I have never received any other payments.” ”
But much of the story they’ve told up to this point appears to be contradicted by public records.
The Moores are the public face of a high court case supported by business and conservative political interests that called into question other parts of the U.S. tax code and that were much debated but never enacted. may exclude certain tax laws. tax on wealth. The case will be heard on December 5th.
The Moores are the latest example of plaintiffs who appear to be simply enforcing their legal rights, but whose cases are supported by others with large sums of money and serious social problems. The Moores turned to the anti-regulation group Competitive Enterprise Institute for help.
Attorney Paul Clement emphasized the importance of this case at a recent Heritage Foundation event, saying, “The constitutionality of a wealth tax may be determined in the context of this case.”
Details of the Moore family’s involvement in the company, originally called KisanKraft Machine Tools Private Limited, were first reported by Tax Notes for tax professionals. Official documents are those submitted to the Government of India.
The issue at issue in this lawsuit is 2017 Tax Bill It was enacted by a Republican-controlled Congress and signed by then-President Donald Trump. The law applies to companies owned by U.S. persons but operating in foreign countries. It imposes a one-time tax on distributions of profits that are not transferred to investors to offset other tax benefits. This measure is expected to generate $340 billion in tax revenue.
The Moores, along with the U.S. Chamber of Commerce and conservative think tanks, argue that this provision violates the 16th Amendment, which allows the federal government to impose income taxes on Americans.
The $15,000 tax bill was for the Moore family’s share of Kissan Craft’s profits.
“Why should I pay income tax if I have no income at all?” asks Charles Moore in a video posted by the Competitive Enterprise Institute.
But far from being a passive investor with no influence over the company, Moore, who worked at Microsoft during his software development career, served on Kisancraft’s board of directors for five years.
Mindy Hertzfeld, a professor of tax practice at the University of Florida School of Law, said, “The Moores’ story about Charles’ involvement in Kissan Craft is in direct conflict with the fiduciary responsibility of individuals sitting on the boards of Indian companies.” It’s contradictory.” on your tax bill.
And there are other signs pointing to broader involvement with Kissancraft than Moore’s testimony. The company paid for his four trips to India, and he made at least two more investments beyond the $40,000 in stock he invested in 2006.
Moore was also prepared to invest about $250,000 more. That money was eventually returned to him by KisanKraft along with his 12% interest.
Another discrepancy is that company documents list only Charles Moore’s name, even though the Moores say they invested the money together.
The couple and their lawyers did not disclose any such information in filings with three different federal courts, including the Supreme Court.
“The original tax return that was the basis of the lawsuit is full of lies,” said Ruben Avi Jonah, an international tax expert at the University of Michigan Law School.
In a brief conversation with The Associated Press, Kathleen Moore said she would not discuss the matter with her husband and would defer questions to his attorney. Moore’s lead attorney, Andrew Grossman, did not respond to messages seeking comment.
Because of this inaction and the Moores’ failure to avail themselves of other legal options that would have deferred, if not relieved, their tax liability, Avi-Yonah and other international tax law experts believe that They suspect the lawsuit was concocted to solve a larger problem. , a tax on billionaires that was proposed by some prominent Democrats but never passed.
The wealth tax would apply to assets such as stock holdings, rather than the income of the wealthiest Americans, and would currently only be taxed when they are sold.
“There was no reason for the court to accept this ruling other than to send a signal to Congress to prevent it from passing a billionaire tax,” said Stephen Rosenthal, a senior fellow at the Urban-Brookings Tax Policy Center. .
Rosenthal said other provisions of the tax code could be overturned by the court’s decision, including measures regarding partnerships, limited liability companies and other business forms.
Changes to these provisions could also affect the finances of some judges.
Chief Justice John Roberts holds a one-eighth interest in an Irish partnership that owns a holiday home in County Limerick, worth up to $15,000, and Justice Clarence Thomas’ wife Ginny holds a one-eighth interest worth up to $15,000. Owns a limited liability company that generated $100,000 in income. The money was drained from a property in Nebraska last year, according to the judge’s financial disclosure form.
Other recent Supreme Court cases advanced by conservative interests have also raised questions about whether the facts were manipulated to elicit controversy before the court. They involved a wedding website designer in Colorado who didn’t want to work with same-sex couples and a public high school football coach in Washington state who wanted to pray on the field.
Rosenthal said the “ugly facts are what matter” and that the justices could send the Moores’ case back to a lower court without making a ruling.
Charles Moore said in a sworn statement that he agreed to invest in a company his friend and former Microsoft colleague Ravindra “Ravi” Kumar Agrawal was starting because he liked its business plan. He said it was because he trusted his friend.
“Additionally, Kisan Craft was founded for a noble purpose and I saw the potential to improve the lives of small and marginal farmers in India,” Moore said.
The incident had already raised ethical questions. Senate Democrats had asked Justice Samuel Alito to recuse himself from the case, citing his interactions with David Rivkin, another lawyer who also represents the Moores. Democrats argued that Mr. Alito sat for four hours in an interview with the paper’s editor and Mr. Rivkin on the Wall Street Journal’s opinion page, casting doubt on his ability to judge the case impartially.
Alito rejected the request. 4 page statement The court said there was “no justifiable reason” for the resignation.
___
Associated Press writer Fatima Hussein contributed to this report.
___
This article has been corrected to reflect that Mindy Hertzfeld is a professor of tax practice at the University of Florida School of Law and not the director of the master’s program in international taxation.
