In the case of Heiner v. Colonial Trust Company, 1927, the U.S Supreme Court ruled on a dispute regarding federal estate tax law. The Colonial Trust Company, as executor of an estate, had paid taxes under protest and then sued for a refund. They argued that certain property transferred by the deceased before death should not be included in their gross estate because it was given without any contemplation of death - meaning they didn't give away this property expecting to die soon after. However, Collector Heiner insisted these transfers were made "in contemplation of death" and thus taxable under federal law at that time. The lower courts sided with Colonial Trust but upon reaching the Supreme Court; it reversed those decisions stating that evidence showed some transfers were indeed made in contemplation of death and hence subject to taxation. This ruling clarified how "contemplation of death" is interpreted within federal tax laws.

In the dissenting opinion for Heiner v. Colonial Trust Company, Justice Holmes argued that the majority's interpretation of tax law was incorrect and overly narrow. He contended that a taxpayer should not be penalized for making an honest mistake in their calculations if they acted in good faith and without intent to defraud the government. According to him, it is unjust to impose additional taxes on someone who has already paid what they believed was due based on reasonable interpretations of complex tax laws. Furthermore, he disagreed with the majority's view that there could be no refund unless there had been an overpayment; instead, he suggested that any payment made under a mistaken belief about its necessity constituted an overpayment which should be refunded by law.