In the 1938 case of Helvering v. Owens, the United States Supreme Court ruled on a matter involving income tax and gift tax laws. The dispute arose when Mr. and Mrs. Owens transferred securities to their children but retained life estates in the income produced by these securities for themselves, meaning they continued to receive profits from them during their lifetimes. The Commissioner of Internal Revenue argued that this arrangement meant that the entire value of these securities should be included in their gross estate for taxation purposes upon death under Section 302(c) of the Revenue Act of 1926. The court agreed with this interpretation, ruling against Mr. and Mrs.Owens who had contended that only part (the present worth) should be taxed as it was a gift made during lifetime not at death.The court held that since they had retained control over those assets until death, it constituted an attempt to pass on property without paying appropriate taxes - essentially avoiding estate taxes through strategic gifting while retaining benefits from said gifts.

In the dissenting opinion for Helvering v. Owens, Justice McReynolds disagreed with the majority's interpretation of Section 22(a) of the Revenue Act of 1934. He argued that this section should not be interpreted to include gifts as gross income and therefore subject to taxation. According to him, a gift is something given out of "detached and disinterested generosity" without expectation or receipt of any benefit in return; it does not constitute an accession to wealth on which tax can be levied under Section 22(a). The justice expressed concern over potential abuse by taxing authorities if such broad interpretations were allowed, potentially leading them into areas traditionally outside their purview like family law matters involving transfers between spouses or parents and children.