The Central Tablet Manufacturing Co. v. United States case in 1973 revolved around the issue of whether or not a company could claim tax deductions for payments made to its president and his wife, who were also the sole stockholders. The Internal Revenue Service (IRS) had disallowed these deductions on the grounds that they constituted constructive dividends rather than ordinary business expenses. The Supreme Court ruled in favor of the IRS, upholding their decision to deny these deductions as legitimate business expenses under Section 162(a)(1) of the Internal Revenue Code. The court found that there was no evidence showing any connection between services rendered by either individual and their respective compensation amounts; thus, it concluded that such payments were more akin to dividends than salary or other forms of compensation for services provided. This ruling set an important precedent regarding how closely held corporations can structure payment arrangements with key personnel who are also significant shareholders.

In the dissenting opinion for Central Tablet Manufacturing Co. v. United States, it was argued that the majority's interpretation of "unfair or deceptive acts or practices" under Section 5(a)(1) of the Federal Trade Commission Act was overly broad and not in line with Congressional intent. The dissenting justices believed that Congress intended to target only those business practices which are immoral, unethical, oppressive, unscrupulous or substantially injurious to consumers - a standard they felt had not been met in this case. They also disagreed with the majority's view on public interest considerations and expressed concern about potential overreach by regulatory agencies if such an expansive interpretation were allowed to stand.