In the case of American Automobile Association v. United States in 1960, the Supreme Court ruled on a tax dispute between the American Automobile Association (AAA) and the Internal Revenue Service (IRS). The IRS argued that AAA should pay income taxes on dues collected from its members because it provided services such as travel planning and roadside assistance, which were considered taxable benefits under federal law. On the other hand, AAA contended these services were incidental to its primary purpose of promoting automobile travel and thus should not be taxed. The court sided with the IRS, ruling that while some non-profit organizations may be exempt from taxation for certain activities related to their mission, this did not apply when those activities produced significant revenue. Therefore, AAA's member dues were subject to income tax since they funded substantial service operations beyond mere advocacy or promotion of automobile travel.

In the dissenting opinion for American Automobile Association v. United States, it was argued that the majority's decision to tax AAA as an insurance company rather than a mutual benefit society was incorrect. The dissenters believed that AAA should be classified as a mutual benefit society because its primary purpose is not to make profits but to provide services and benefits for its members at cost. They pointed out that any surplus funds generated by AAA are returned back to the members in form of reduced future dues or increased services, which is characteristic of mutual benefit societies and not profit-driven insurance companies. Furthermore, they disagreed with the majority's interpretation of "insurance" under federal law, arguing that it should only apply when there is shifting and distribution of risk involved - something they believe does not happen in case of AAA since it merely provides emergency road service on reimbursement basis without assuming any risks itself.