Supreme Court Urged to Protect ‘Essential Restraint’ on Taxation

The US Supreme Court should make clear that Congress’ power to tax income only extends to income that a taxpayer has actually realized, a married couple said in a Wednesday brief.

The high court agreed in June to hear Charles and Kathleen Moore’s case over whether the government had the authority to tax them as shareholders of an Indian farming equipment company, even though the company hadn’t distributed earnings to them. Oral arguments in the case have not yet been scheduled.

The couple are only suing for a refund of about $15,000, but the government has estimated that the tax ...