The Sheldon B. Bufferd v. Commissioner of Internal Revenue case in 1992 revolved around the issue of whether or not a taxpayer could deduct losses from limited partnership investments as "at-risk" under Section 465 of the Internal Revenue Code (IRC). The Supreme Court ruled unanimously that such deductions were not permissible unless the taxpayer was personally liable for repayment. In this case, Bufferd had invested in two film production partnerships and claimed his share of their losses on his tax returns, arguing that he was at risk because he could potentially lose his investment if the films did not make a profit. However, since he wasn't personally liable to repay any debts incurred by these partnerships beyond his initial investment, it didn't meet IRC's definition of being 'at risk'. Therefore, according to Justice Thurgood Marshall who delivered the opinion for a unanimous court, Mr.Bufferd couldn’t claim those deductions.

In the dissenting opinion for Sheldon B. Bufferd v. Commissioner of Internal Revenue, Justice Scalia disagreed with the majority's interpretation of Section 453(d) and its application to this case. He argued that the language in Section 453(d) does not explicitly state that a taxpayer must report all income from an installment sale in one year if they choose to opt out of installment reporting; rather, it merely states that opting out will result in "the rules provided by subsection (a)" no longer applying - which he interprets as meaning only those specific rules related to timing and calculation under subsection (a). Therefore, according to Scalia’s view, other general tax principles could still apply even after opting out – including spreading income over multiple years based on when payments are received or due. Furthermore, he criticized the majority for relying heavily on legislative history instead of statutory text itself while interpreting ambiguous laws.