In the 1931 case Heiner v. Donnan, the United States Supreme Court ruled on a tax dispute involving federal estate taxes. The issue at hand was whether gifts made within two years of death could be included in an individual's gross estate for taxation purposes under Section 302(b) of the Revenue Act of 1926. The defendants were executors to George Donnan’s will who had given his children substantial amounts of money less than two years before he died and argued that these gifts should not be subject to estate tax as they were completed outside the contemplation of death. However, Collector Heiner insisted that these transfers fell within this category and thus should be taxed accordingly. The court sided with Donnan's executors, ruling that such a presumption was unconstitutional because it violated due process rights by assuming guilt without evidence or opportunity for rebuttal - essentially presuming every gift made in a two-year period prior to death is done so in contemplation thereof unless proven otherwise by clear and strong proof; which placed an unfair burden on taxpayers.

In the dissenting opinion for Heiner v. Donnan, Justice Holmes argued that there was no constitutional issue at hand and thus, the Supreme Court had no jurisdiction over this case. He believed that it was not a question of whether or not Congress could tax gifts made within two years of death as part of an estate but rather if they chose to do so in this particular instance. In his view, Congress had clearly intended to include such gifts in its definition of "gross estate" under the Revenue Act and therefore their decision should be upheld by the courts. Furthermore, he disagreed with majority's interpretation that these provisions were meant only as presumptions which could be rebutted by evidence showing lack of intent to evade taxes; instead he saw them as definitive rules set forth by Congress.