The U.S. Supreme Court case Helvering, Commissioner of Internal Revenue v. Independent Life Insurance Co., 1933 revolved around the taxability of life insurance companies' income from interest and dividends on their investments. The Independent Life Insurance Company argued that this income was not taxable under the federal revenue acts because it was used to fulfill policy obligations to its customers, rather than being profit for the company itself. However, the court ruled in favor of Guy T. Helvering, then-Commissioner of Internal Revenue Service (IRS), stating that these revenues were indeed subject to taxation as they constituted gross investment income regardless if they are set aside for future liabilities or not.

In the dissenting opinion for Helvering v. Independent Life Insurance Co., Justice Cardozo disagreed with the majority's interpretation of Section 245(a) of the Revenue Act, which allowed deductions from gross income for amounts paid as dividends to policyholders. He argued that this provision was intended to apply only when such payments were made out of surplus or earnings and not when they were merely a return on premiums previously paid by policyholders. In his view, allowing companies to deduct these returns would result in an unjustified tax benefit since it would effectively allow them to avoid taxation on part of their premium income. Furthermore, he contended that interpreting Section 245(a) in this way contradicted its legislative history and purpose, which was aimed at preventing double taxation rather than providing insurance companies with additional tax benefits.