In the case of Helvering v. Price, 1939, the U.S Supreme Court ruled on a tax dispute involving dividends received by stockholders from a corporation that had previously earned income abroad. The Commissioner of Internal Revenue argued that these dividends should be taxed as gross income under Section 115(b) and (g) of the Revenue Act of 1928. However, Mr. Price contended that this was not applicable since he did not personally earn any foreign income; it was his company's earnings overseas which were distributed to him as part of his dividend payments. The court sided with the Commissioner in a unanimous decision stating that even though Mr. Price himself didn't directly earn money outside US borders, he still benefited from those earnings through his dividend payments and therefore they constituted taxable gross income according to existing law at that time.

In the dissenting opinion for Helvering v. Price, Justice McReynolds disagreed with the majority's interpretation of Section 302(c) of the Revenue Act of 1926. He argued that this provision was intended to prevent tax evasion by shareholders who attempted to withdraw earnings and profits from a corporation without paying dividend taxes. However, he believed that it should not apply in cases where there is no attempt at tax avoidance or evasion. In this case, he felt that Mr. Price had made a genuine sale of his stock back to the company and therefore should not be subject to additional taxation on these proceeds as if they were dividends rather than capital gains from a legitimate business transaction.