In the 1919 case of Evans v. Gore, the U.S. Supreme Court ruled that a federal income tax on Judge Walter Evans' salary was unconstitutional because it diminished his compensation during his time in office, violating Article III of the Constitution. The court held that judges should not be subject to any potential influence from other branches of government and their salaries should remain untouched while they are serving their terms. This decision established what is known as "the Compensation Clause," which protects federal judges' salaries from being reduced by Congress or the President during their tenure in order to maintain judicial independence.

In the dissenting opinion for Evans v. Gore, Justice Holmes argued that the Sixteenth Amendment allowed Congress to tax all income from whatever source derived without apportionment among the states and without regard to any census or enumeration. He contended that this included a judge's salary as it is an income like any other. The majority had ruled otherwise, stating that taxing a federal judge's salary was unconstitutional because it diminished their compensation contrary to Article III of the Constitution which protects judicial independence by ensuring life tenure and undiminished pay for judges. However, Holmes disagreed with this interpretation arguing there was no reason why taxes should not be paid on such salaries just like every other citizen does on theirs.