Moore v. United States, appeal to Supreme Court on direct taxation

Don't get your hopes up. There are 191 petitions left and they will accept maybe five of them. I suspect the relist is because two or three of the usual suspects like it, probably the same ones who like the absurd Moore vs Harper election law case, hoping they can round up one more vote.

You've whooshed me.

Note: Completely different appellant

Moore v Harper would test the independent state legislature theory. That's nothing to do with unapportioned direct taxation. I don't even see how it would have the same majority.

As far as the independent state legislature theory, if that's a VALID theory, then our Founding Fathers are absolutely subject to criticism as that's simply the result of a massive drafting error in the Constitution. If it's an invalid theory, then federal courts are being asked to ignore plain language in the Constitution.

It's along the lines privileges OR immunities versus privilege AND immunities.

According to Adam H. Kerman snipped-for-privacy@chinet.com:

Their argument seems to be that they don't owe tax because the income was not paid out, and assert that courts have always said that you only owe tax on income you have received.

That's just false. Zero coupon bonds are sold at a discount and redeemed at face value. Each year the value of the bond is a little more as it gets closer to the maturity date, with the increase called imputed interest. Even though you don't get that imputed interest, you have to pay taxes on it each year. (If somone's about to ask what about US Savings Bonds, they have a special exception.)

I doubt SCOTUS has an appetite to screw up the entire bond market for the benefit of some guy with a small investment in an Indian firm. Keep in mind that this argument is just about timing. You owe tax either way, the question only being when you pay it.

R's, John

"John Levine" snipped-for-privacy@taugh.com wrote in news:u77gbn$lkn$ snipped-for-privacy@gal.iecc.com:

That's right. When there is a statute to that effect, such as with accrual taxpayers, partners and S-corporation shareholders, money is taxed when it's earned, not when it's received. It's all treated as income, even though not received. And that takes it out of the apportionment clause.

Someone said the 9th circuit is overruled a lot. It's not. It's the second most overruled circuit, at about a 6% overrule rate the last time I checked. So it's not likely to be overtured even though it is the 9th circuit.

The dividend must be issued, at least put on the books, in order to be re-invested. When would that occur, at year end or throughout the year? Sound like an informal process.

Isn't this original issue discount? I get 1099s for this each year. No cash.

This was a special case - a one-time tax for controlled foreign corporations. So the normal requirements didn't apply. For that situation it was taxed much like a partnership or S-corporation.

According to Adam H. Kerman snipped-for-privacy@chinet.com:

Yup. A zero coupon bond is all OID.

The only zeros the US government issues are T bills, with maturities from 4 to 52 weeks.

For longer term bonds, a dealer can separate a note or bond into STRIPS, in which each interest payment and the principal turn into a separate security with a separate CUSIP. If you start with a 10 year bond with semi-annual interest payments, that turns into 21 STRIPS, twenty small ones for the interest and one big one at the end. It's less common but also possible to take all of the remaining coupons and principal and put the bond back together.