## Facts

- George W. Cook was a native-born U.S. citizen who became permanently resident and domiciled in Mexico City.
- Cook received income derived from real and personal property located entirely in Mexico, outside U.S. territorial jurisdiction.
- The United States assessed a federal income tax under § 210 of the Revenue Act of 1921, which imposed a normal tax on the net income of every individual and applied specified rates to citizens or residents of the United States.
- The assessment totaled $1,193.38; Cook paid the first installment ($298.34) under protest after the Collector of Internal Revenue demanded that he file a return.
- Cook sued the Collector (Tait) to recover the installment, alleging Congress lacked constitutional power to tax income of a citizen residing abroad when the income was from property located abroad.

## Issues

1. Whether Congress has constitutional power to impose a federal income tax on a U.S. citizen domiciled abroad on income derived from property located outside the United States.
2. Whether the federal taxing power is limited by territorial jurisdiction so that both the taxpayer and the income-producing property must be within U.S. territory to be taxed.
3. Whether such taxation violates constitutional limitations or international law principles asserted to restrict extraterritorial taxation.

## Decision

- The Supreme Court affirmed the District Court’s dismissal of Cook’s refund action.
- The Court held that Congress has power to tax the income received by a native U.S. citizen domiciled abroad from property situated abroad.
- The Court rejected the claim that the federal taxing power is strictly confined to U.S. territorial jurisdiction.
- The Court treated the dispute as a question of constitutional power rather than policy, concluding the tax was within Congress’s competency.

## Legal Principles

- U.S. citizenship supplies a sufficient nexus for federal taxation of worldwide income, even when the citizen is domiciled outside the United States.
- Congress’s taxing power is not categorically limited to persons, property, or income located within U.S. territory when applied to U.S. citizens.
- A citizen’s continuing relationship to the United States—understood as allegiance and governmental benefits/protection connected to citizenship—can justify imposing an income tax on foreign-source income.
- Claims that international law or constitutional doctrine imposes an absolute territorial bar to taxing a citizen’s foreign-source income were rejected.

## Conclusion

Cook v. Tait sustained citizenship-based worldwide income taxation, holding that Congress may tax a U.S. citizen living abroad on income from foreign-located property, and affirming dismissal of a refund suit challenging that authority.


Cook v. Tait, 265 U.S. 47 (1924)