In the case of Commissioner of Internal Revenue v. Wheeler et al., Executors, et al., 1944, the U.S Supreme Court was tasked with determining whether a trust created by a decedent for his wife and children could be considered part of his gross estate under Section 811(c) of the Internal Revenue Code. The decedent had retained income from the trust during his lifetime but relinquished control over its principal before he died. The court held that since the decedent did not retain any power or interest in changing who would enjoy possession or enjoyment after their death, it should not be included in their gross estate. This decision clarified how trusts are treated for tax purposes when they are established prior to death without retaining any powers over them.

In the dissenting opinion for Commissioner of Internal Revenue v. Wheeler et al., Executors, et al., Justice Robert H. Jackson argued that the majority's decision was inconsistent with both statutory language and legislative intent. He contended that Congress intended to tax all income from whatever source derived unless explicitly exempted by law, and therefore, it should include gifts inter vivos in gross estate for taxation purposes as well. He also pointed out that there is no explicit exemption in the statute for such transfers made within two years of death without consideration or expectation of survival; hence they should be considered part of a decedent’s gross estate subject to federal estate taxes under Section 811(c) of the Internal Revenue Code. Furthermore, he criticized the majority's reliance on previous court decisions rather than interpreting directly from congressional statutes.