The U.S. Supreme Court case Bankers Pocahontas Coal Co. v. Burnet, Commissioner of Internal Revenue in 1932 revolved around the issue of tax deductions for a coal company's expenses related to its mining operations. The Bankers Pocahontas Coal Company argued that it should be allowed to deduct from its taxable income the costs associated with maintaining and developing their mines as these were ordinary and necessary business expenses under Section 214(a) of the Revenue Act of 1918. However, the IRS disagreed, arguing that such costs should be capitalized rather than deducted because they added value to capital assets (the mines). The Supreme Court sided with the IRS, ruling that these expenditures constituted capital investments since they extended the life span and profitability of their mines beyond one year; thus not deductible as an ordinary business expense but must instead be depreciated over time.

In the dissenting opinion for the Bankers Pocahontas Coal Co. v. Burnet case, it was argued that the majority's decision to allow a tax deduction for depletion of coal mines went against established legal principles and precedent. The dissenting justices believed that allowing such deductions would result in an unfair advantage for mining companies over other businesses which could not claim similar deductions on their assets or resources. They also pointed out inconsistencies in how these deductions were calculated, arguing this could lead to potential abuses of the system by corporations seeking to minimize their tax liabilities. Furthermore, they disagreed with the majority's interpretation of relevant statutes and regulations governing taxation, asserting that these did not support such broad allowances for depletion expenses as claimed by mining companies.