The U.S. Supreme Court case Helvering, Commissioner of Internal Revenue v. Kehoe in 1939 revolved around the issue of taxation on income from a trust fund established by an American citizen residing abroad. The respondent, Kehoe, was a beneficiary to this trust and argued that the money received should not be subject to U.S. taxes as it originated from property located outside of America's jurisdiction - specifically Canada. However, the court ruled against Kehoe stating that despite his residence being in Canada at the time he became entitled to receive income from said trust fund (established under New York law), he is still considered a resident for tax purposes since he had not renounced his citizenship or shown intent to abandon residency permanently. Therefore, regardless of where funds originate or where beneficiaries reside temporarily; if they are citizens and have not abandoned their residency status legally then they are liable for federal income tax on worldwide earnings.

In the dissenting opinion for Helvering v. Kehoe, Justice Black argued that the majority's interpretation of Section 22(a) was too broad and inconsistent with its original intent. He contended that Congress intended to tax only income derived from capital, labor, or both combined; not gifts received by beneficiaries under a trust agreement. The justice believed that the court should adhere strictly to this definition of gross income unless there is clear evidence showing congressional intent to deviate from it. In his view, no such evidence existed in this case as he did not believe Congress intended for these types of distributions to be taxed as income when they passed the Revenue Act of 1921 which exempted them from taxation initially.