In the 1945 case Commissioner of Internal Revenue v. Tower, the U.S. Supreme Court ruled on a matter involving income tax law and family partnerships. The court held that when a husband contributes capital to establish a business partnership with his wife, but retains control over the management and profits of said business, then any income generated by this enterprise is attributable solely to him for federal income tax purposes. This decision was based on an interpretation of Section 22(a) of the Revenue Act which states that gross income includes gains derived from dealings in property whether realized through direct ownership or through an interest in a partnership. The ruling essentially established that such familial partnerships would not be recognized for taxation purposes unless they were formed as bona fide businesses where each partner made substantial contributions and had some degree of control.

In the dissenting opinion for Commissioner of Internal Revenue v. Tower, Justice Frank Murphy disagreed with the majority's decision to tax a husband and wife as separate entities in their jointly owned business. He argued that this interpretation was not consistent with the intent of Congress when it enacted Section 22(a) of the Revenue Act, which allows spouses to split income from property held jointly or as community property. According to Murphy, treating spouses as separate taxpayers would lead to unjust results because it would allow wealthy couples who can afford sophisticated legal advice to avoid taxes by structuring their businesses in certain ways while less affluent couples without such advice could be unfairly taxed on joint income. Furthermore, he believed that this approach undermines marital unity by encouraging spouses to act independently rather than cooperatively in managing their financial affairs.