In the 1920 case of Friedman v. United States, the Supreme Court ruled on a matter involving bankruptcy and tax liability. The petitioner, Mr. Friedman, was a bankrupt individual who had his assets distributed among his creditors by a trustee in bankruptcy before he paid off an income tax debt to the government for that year's earnings. The question at hand was whether or not this distribution could be made without first paying off the owed taxes. The court held that under Section 64b of the Bankruptcy Act of 1898, which prioritizes certain debts over others during asset distribution in cases of bankruptcy, taxes due to federal or state governments are considered unsecured claims and do not take precedence over other debts unless explicitly stated otherwise by Congress. Therefore, it was decided that Mr. Friedman’s income tax debt did not need to be satisfied before distributing assets amongst his creditors as per their respective priorities established under law.

The dissenting opinion in the case of Friedman v. United States argued that the majority's decision to uphold a conviction for conspiracy to defraud the government was incorrect, as it relied on an overly broad interpretation of what constitutes fraud. The dissenters contended that not every dishonest act or lie can be considered fraudulent under criminal law; there must be some sort of harm or injury inflicted upon another party. In this case, they believed no such harm had been proven beyond reasonable doubt against Friedman and his co-defendants who were accused of conspiring to submit false affidavits about their military service records in order to obtain passports illegally. They further pointed out inconsistencies and errors in how evidence was handled during trial proceedings which could have potentially influenced its outcome unfairly against defendants' favor.