In the case of Graham v. Du Pont, 1922, the United States Supreme Court was tasked with determining whether or not a tax refund claim could be made by an estate for taxes paid on gifts that were later returned to the estate after being rejected by beneficiaries. The court ruled in favor of Alfred I. du Pont's estate, stating that it had been wrongfully taxed and was entitled to a refund from the Internal Revenue Service (IRS). The IRS had initially argued that once a gift is given it cannot be taken back into consideration for taxation purposes even if it is returned; however, this argument was dismissed by Justice Oliver Wendell Holmes Jr., who stated that "a man has not given away what he still controls." Therefore, since du Pont retained control over his assets until death due to rejection of gifts by beneficiaries - these assets should have never been considered as taxable gifts.

In the dissenting opinion for Graham v. Du Pont, it was argued that the majority's decision to allow tax deductions on interest payments made by a corporation to its shareholders was inconsistent with previous rulings and interpretations of tax law. The dissent emphasized that these payments were not true debts but rather dividends in disguise, as they were contingent upon profits and did not carry any obligation for repayment if profits weren't realized. As such, they should be treated as equity investments rather than debt obligations under the Internal Revenue Code. This interpretation would prevent corporations from using disguised dividends to avoid taxation and maintain fairness in the application of tax laws across different types of business entities.