The U.S. Supreme Court case Burnet, Commissioner of Internal Revenue v. Porter et al., Executor in 1930 revolved around the issue of estate taxation and whether or not a certain deduction was permissible under federal law. The executors of an estate had claimed a deduction for state inheritance taxes paid on non-probate property (property that passes directly to beneficiaries without going through probate). The Commissioner of Internal Revenue denied this claim, arguing that such deductions were only allowed for taxes paid on probate property (property included in the decedent's will and subject to probate proceedings). This led to litigation with the executors contending they should be able to deduct these expenses from their gross income when calculating federal tax liability. However, the Supreme Court sided with the Commissioner by ruling that only those state inheritance taxes which are levied upon property passing through administration may be deducted from gross income under Section 303(a)(3) of the Revenue Act.

In the dissenting opinion for Burnet, Commissioner of Internal Revenue v. Porter et al., Executor, Justice Holmes disagreed with the majority's interpretation of tax law and its application to estate taxes. He argued that a literal reading of the statute would not result in an unjust double taxation as feared by the majority. Instead, he believed that Congress intended for both income and estate taxes to apply concurrently without any deductions or credits between them. According to him, this was because each tax served different purposes: income tax being levied on personal earnings while estate tax was imposed on property transfers after death. Therefore, allowing deductions from one based on payment of another would undermine their separate objectives and distort their effects.