District Court Holds Section 965 Constitutional
On November 19, the U.S. District Court for the Western District of Washington held that the transition tax under section 965 was constitutional. Section 965, enacted by the Tax Cuts and Jobs Act, generally imposes a transition tax on a US shareholder’s pro rata share of the accumulated earnings and profits of certain foreign corporations. The court found that the transition tax was a tax on income allowed under the Sixteenth Amendment and that the transition tax did not violate due process.
Read More: Moore v. United States