In the case of BankAmerica Corp. et al. v. United States in 1982, the U.S Supreme Court ruled on a tax dispute between BankAmerica Corporation and the Internal Revenue Service (IRS). The issue at hand was whether or not federal income taxes paid by a national bank should be deducted from its gross income before calculating franchise tax owed to California state under Section 548 of National Bank Act. The court held that such federal taxes are deductible when computing a national bank's taxable income for purposes of assessing California's franchise tax, reversing an earlier decision by the Ninth Circuit Court of Appeals which had sided with IRS' argument that these payments were non-deductible expenses under section 164(a) of Internal Revenue Code.

In the dissenting opinion for BankAmerica Corp. et al. v. United States, Justice Blackmun argued that the majority's interpretation of Section 265(2) of the Internal Revenue Code was incorrect and inconsistent with its legislative history and purpose. He contended that Congress intended to prevent businesses from deducting interest on loans used to carry tax-exempt securities, not to penalize banks for offering these types of securities as a service to their customers. According to him, this misinterpretation could potentially discourage banks from dealing in tax-exempt obligations altogether due to fear of losing valuable deductions - an outcome he believed Congress did not intend when drafting Section 265(2). Furthermore, he disagreed with the majority's view that there is no distinction between carrying one’s own portfolio and carrying it for others; stating such differentiation does exist under federal income tax law.