In the case of Commissioner of Internal Revenue v. Asphalt Products Co., Inc., 1986, the Supreme Court addressed a dispute over tax deductions claimed by Asphalt Products Company (APC). APC had purchased asphalt businesses and allocated part of the purchase price to depletable assets, claiming depletion deductions on its income tax returns. The IRS disallowed these deductions arguing that they were not allowable under section 613(c) of the Internal Revenue Code because APC was not engaged in mining or mineral extraction activities. The Tax Court sided with APC but this decision was reversed by an appellate court which agreed with IRS's interpretation. The Supreme Court held that while it is true that Congress intended for Section 613(c) to apply only to taxpayers who are directly involved in extraction processes, it did not intend for such a narrow reading as proposed by IRS where only those physically extracting minerals can claim depletion allowances. Instead, it ruled that any taxpayer who has an economic interest in mineral deposits and whose income is dependent upon their extraction qualifies for depletion allowances under Section 613(c). Therefore, since APC had acquired substantial economic interests in asphalt deposits through its purchases and depended on their extraction for income generation purposes, it qualified for claiming depletion allowances.

In the dissenting opinion for Commissioner of Internal Revenue v. Asphalt Products Co., Inc., Justice Blackmun disagreed with the majority's interpretation of Section 482 of the Internal Revenue Code, which allows for allocation between related entities to prevent tax evasion or distortion. He argued that this section was not intended to be used as a tool by the IRS to reallocate income and expenses in order to maximize taxable income, but rather it should only be applied when there is clear evidence of manipulation or misrepresentation by taxpayers. The justice believed that Asphalt Products had acted reasonably and within its rights under existing law in structuring its transactions as it did, without any intent to evade taxes. Therefore, he felt that applying Section 482 in this case was inappropriate and unjustified.