In the 1935 case of Helvering v. St. Louis Union Trust Co., the U.S Supreme Court was tasked with determining whether a trust, created by a corporation for its employees and funded by contributions from both employer and employee, could be taxed as an association under federal law. The Commissioner of Internal Revenue argued that it should be considered an association because it had some characteristics similar to corporations such as continuity of life, centralization of management, limited liability and free transferability of interests. However, the court disagreed stating that these similarities were not enough to classify it as an association since its primary purpose was not conducting business but providing security for employees in their old age or during illness which is more akin to insurance than business activity. Therefore, the court ruled against taxing trusts like associations.

In the dissenting opinion for Helvering v. St. Louis Union Trust Co., Justice Stone argued that the majority's interpretation of tax law was incorrect and overly broad, potentially leading to unjust outcomes in future cases. He contended that a trust should not be considered an "association" under federal tax law simply because it possesses some characteristics commonly associated with corporations or partnerships. Instead, he believed that trusts should only be taxed as associations if they are used primarily for business purposes rather than merely holding and managing property on behalf of beneficiaries. In his view, this approach would better align with Congress's intent when drafting the relevant legislation and prevent undue hardship for taxpayers who use trusts for legitimate non-business purposes.