In the case of Burnet v. Desmornes Y Alvarez, 1912, the U.S. Supreme Court dealt with a dispute over inheritance tax law. The respondent was an heir to an estate and claimed that she should not be liable for federal taxes on her inherited property because it was located in Cuba and therefore outside of U.S jurisdiction. However, the Commissioner of Internal Revenue disagreed and assessed a deficiency against her under applicable provisions of United States revenue laws concerning estates. The Supreme Court ruled in favor of the government's position that even though real property is physically situated abroad, if it belongs to a decedent who at his death was domiciled within United States territory then such property is subject to federal taxation upon transfer by death (inheritance). This decision established important precedent regarding international aspects related to American tax law.

In the dissenting opinion for Burnet v. Desmornes Y Alvarez, Justice Holmes disagreed with the majority's decision to deny a claim of ownership over property in Cuba based on an 1898 treaty between Spain and the United States following the Spanish-American War. He argued that while it was true that under international law, a new sovereign has full power to decide what rights from previous sovereignty will be recognized, this principle did not apply because at no point did U.S. sovereignty extend over Cuba after Spain relinquished control. Instead, he contended that U.S.'s role was more akin to an occupying force during wartime rather than as a traditional sovereign entity; thus it had limited powers which didn't include deciding land claims dating back before its involvement in Cuban affairs. Therefore, according to him, such matters should have been left up to Cuban courts once they established their own government post-independence.