The U.S. Supreme Court case Helvering v. Mountain Producers Corporation in 1937 revolved around the issue of tax deductions for depletion and depreciation by oil companies. The Mountain Producers Corporation, an oil company, claimed that it was entitled to a deduction from its gross income for both depletion and depreciation on its properties used in production activities under the Revenue Act of 1928. However, Commissioner Guy T. Helvering of Internal Revenue argued that such double deductions were not allowed under the law as they would result in excessive reductions to taxable income. The Supreme Court sided with Helvering's interpretation of the law, ruling that while taxpayers are generally free to structure their business transactions as they see fit, this freedom does not extend to using those structures solely for tax avoidance purposes if there is no legitimate business purpose behind them other than reducing taxes owed. This decision established important precedent regarding how far businesses can go when structuring their operations and transactions purely for tax advantages.

In the dissenting opinion for Helvering v. Mountain Producers Corporation, Justice Benjamin N. Cardozo disagreed with the majority's interpretation of tax law and its application to this case. He argued that a corporation should not be allowed to deduct from its gross income any amount paid as dividends on its preferred stock if such payment was made out of capital or surplus instead of earnings or profits accumulated after February 28, 1913 (the effective date of the Sixteenth Amendment). According to him, allowing such deductions would contradict Congress' intent when it enacted relevant tax laws and could lead to potential abuses where corporations might manipulate their financial transactions in order to minimize their taxable income artificially. Furthermore, he contended that previous court decisions cited by the majority did not support their conclusion because those cases involved different factual circumstances and legal issues.