The Estate of Sanford v. Commissioner of Internal Revenue case in 1939 revolved around the issue of estate tax liability. The Supreme Court ruled that a widow's renunciation, or refusal to accept, her dower rights (a provision for a wife's support upon her husband's death) constituted taxable gifts under federal law. This was because she had an existing property interest in those rights and by renouncing them, she transferred this property interest to others - specifically, the residual beneficiaries under her late husband’s will. Therefore, according to the court ruling, such transfers were subject to gift taxes as per Section 501 of the Revenue Act of 1924.

The dissenting opinion in the case of Estate of Sanford v. Commissioner of Internal Revenue argued that the majority's interpretation was incorrect and that Congress did not intend to tax gifts made in contemplation of death as transfers taking effect at death. The dissenting justices believed that a gift made during one's lifetime, even if it is motivated by an impending demise, should be considered a completed transaction and therefore not subject to estate taxes upon the giver’s death. They contended this perspective aligns more closely with Congressional intent when drafting relevant legislation, which aimed to prevent evasion of estate taxes through last-minute gifting rather than penalize all gifts given near end-of-life out of generosity or affection. Thus, they disagreed with imposing additional taxation on such transactions beyond what would normally apply for inter vivos (between living persons) transfers.