In the case of Helvering, Commissioner of Internal Revenue v. Therrell in 1937, the U.S Supreme Court ruled on a dispute regarding income tax liability. The respondent, Mr. Therrell had received dividends from his life insurance policy and argued that these should not be considered as taxable income under Section 22(a) of the Revenue Act (1928). However, the petitioner - Guy T. Helvering who was serving as Commissioner for Internal Revenue disagreed with this interpretation and sought to impose taxes on those dividends. The court sided with Mr. Therrell's argument by stating that such dividends were essentially a return or rebate on premium payments made by him towards his life insurance policy rather than an actual profit or gain which could be taxed under existing laws at that time. Therefore, it concluded that these amounts did not constitute gross income within meaning of Section 22(a), hence they were exempted from federal taxation. This decision set a precedent for future cases involving similar disputes over what constitutes taxable income in relation to returns from life insurance policies.

In the dissenting opinion for Helvering v. Therrell, Justice Cardozo expressed his disagreement with the majority's interpretation of Section 22(a) of the Revenue Act. He argued that this section should not be interpreted to include in gross income any increase in value of property prior to its realization through a sale or other disposition. According to him, such an interpretation would contradict established principles and precedents regarding taxation on unrealized appreciation which is considered as mere paper profits until it has been realized by a sale or exchange. He further contended that if Congress intended such a radical departure from these principles, it would have done so explicitly rather than leaving it up to judicial inference. Therefore, he believed that Mr. Therrell’s gain from selling his stock options should not be taxed because they were merely potential gains at the time when he received them and did not become actual profit until their eventual sale.