The Automobile Club of Michigan v. Commissioner of Internal Revenue case in 1956 revolved around the tax-exempt status of a non-profit organization. The Automobile Club of Michigan, which provided emergency road services and other benefits to its members, was initially granted tax-exempt status under Section 101(9) of the Internal Revenue Code as a "business league." However, this exemption was later revoked by the Commissioner on grounds that it operated for profit due to its substantial reserve funds and competitive practices with commercial enterprises. The club contested this decision arguing that their reserves were necessary for future member claims and not indicative of profit-making intentions. Ultimately, the Supreme Court ruled against them stating that an entity could be considered operating for profit even if those profits are used solely for providing better service to its members rather than being distributed among them or shareholders.

In the dissenting opinion for Automobile Club of Michigan v. Commissioner of Internal Revenue, it was argued that the majority's decision to classify certain income as non-taxable dues rather than taxable sales revenue contradicted established tax principles and previous court decisions. The dissenting justices believed that when members paid additional fees for services such as towing or emergency road service, these payments constituted a sale of goods or services and should be taxed accordingly. They disagreed with the majority's view that these transactions were part of a broader membership benefit package funded by dues, which would make them exempt from taxation under existing laws governing nonprofit organizations. The dissenters expressed concern about potential abuse if other nonprofits adopted similar practices to avoid taxes on their income-generating activities.