In the Bogardus v. Commissioner of Internal Revenue case in 1937, the U.S Supreme Court ruled on a tax dispute involving employee stock ownership plans (ESOPs). The petitioner, Mr. Bogardus, was part of an ESOP where he and other employees received shares from their employer as compensation for services rendered. When these shares increased in value, the IRS sought to tax this increase as income which led to a legal challenge by Mr. Bogardus who argued that it should not be considered taxable income but rather gifts or capital gains. The court sided with Mr. Bogardus stating that while his receipt of company stocks could be seen as payment for services rendered and thus potentially taxable under normal circumstances; however, because they were given within an ESOP structure designed specifically to benefit employees without any obligation or expectation attached beyond regular employment duties - they did not constitute additional remuneration subject to taxation but instead fell into gift territory.

In the dissenting opinion for Bogardus v. Commissioner of Internal Revenue, Justice Stone argued that the majority's decision to exclude payments made by a corporation to its employees from taxable income was incorrect. He believed that these payments were not gifts but rather compensation for services rendered, and thus should be considered taxable income under federal law. He pointed out that there was no evidence suggesting these payments were intended as gifts or donations; instead, they appeared to be part of an established pattern of payment in return for work performed by the employees. Furthermore, he noted that allowing such exclusions could open up loopholes in tax laws and potentially lead to widespread tax evasion.