In the case of Commissioner of Internal Revenue v. Shapiro et ux., the Supreme Court ruled in favor of the IRS, upholding their right to impose a tax deficiency on Mr. and Mrs. Shapiro for income they had not reported from 1961-63. The Shapiros argued that this was unconstitutional as it violated their Fifth Amendment rights against self-incrimination, since they were under investigation by a grand jury at the time for possible criminal charges related to these same unreported earnings. They claimed that any information provided to complete an accurate tax return could potentially be used against them in court proceedings relating to those charges. The Supreme Court disagreed with this argument, stating that there is no constitutional right allowing taxpayers to refuse providing financial information solely based on potential incrimination risks unless such risk is "substantial and real", which was not proven by Shapiros here. Furthermore, it clarified that filing an inaccurate return or failing to file one altogether does not protect individuals from prosecution; instead, it may result in additional penalties.

In the dissenting opinion for Commissioner of Internal Revenue v. Shapiro et ux., Justice William J. Brennan Jr., joined by Justices Thurgood Marshall and Harry Blackmun, disagreed with the majority's interpretation of Section 6901(a) of the Internal Revenue Code. They argued that this section does not impose a tax liability on transferees but merely provides a procedural mechanism to collect existing liabilities from them. The dissenters believed that since there was no underlying tax liability assessed against Mr. Shapiro before his death, there could be no derivative liability imposed on Mrs. Shapiro as a transferee after his death under Section 6901(a). Furthermore, they contended that even if one were to accept the majority’s view about imposing such derivative liabilities posthumously, it would still require an assessment against Mr.Shapiro during his lifetime which did not occur in this case according to their understanding of facts presented.