In the 1947 case Commissioner of Internal Revenue v. Sunnen, the US Supreme Court addressed issues related to double taxation and collateral estoppel in tax law. The respondent, Earl P. Sunnen, had entered into a royalty agreement with his own corporation for patents he owned and argued that these royalties should not be subject to self-employment taxes as they were capital gains rather than ordinary income. In an earlier case (1935), it was ruled in favor of Sunnen's argument but later changes in tax laws led the IRS to challenge this ruling again for subsequent years' taxes (1941-44). The court held that each taxable year is a separate unit for assessment purposes; hence previous decisions do not bind future assessments under changed circumstances or changes in applicable law. Therefore, despite having won his initial case against being taxed on these royalties as income, due to alterations made within tax laws since then, Mr.Sunnen could still be liable for those same taxes on similar earnings from different years.

In the dissenting opinion for Commissioner of Internal Revenue v. Sunnen, Justice Rutledge argued that the majority's decision was inconsistent with previous rulings and principles of tax law. He contended that a taxpayer should not be allowed to avoid paying taxes on income derived from their own property by transferring it into a trust or other legal entity. The justice believed this created an unfair loophole in the tax code, allowing wealthy individuals to evade taxation while others could not. Furthermore, he disagreed with the majority's interpretation of "assignment of income" doctrine and its application in this case; he felt it was too narrow and restrictive. In his view, any transfer or assignment which allows one person to receive another’s income without adequate consideration should be considered as taxable under federal law.