The U.S. Supreme Court case Helvering, Commissioner of Internal Revenue v. William Flaccus Oak Leather Co., 1940 revolved around the issue of tax deductions for a corporation's contribution to its employees' pension trust fund. The company in question had made contributions to this fund over several years but did not claim them as deductions until later years when it was more financially advantageous for them to do so. The IRS argued that these contributions should have been deducted in the year they were made and disallowed the delayed deductions, leading to a dispute between the two parties. The Supreme Court ruled in favor of the IRS, stating that under Section 23(p) of the Revenue Act (1932), employers could only deduct their contributions from their taxable income during the year those payments were actually made into an employees’ pension trust fund. Therefore, any attempt by an employer to delay claiming such deductions until future fiscal periods would be considered inconsistent with statutory provisions governing federal taxation.

In the dissenting opinion for Helvering v. William Flaccus Oak Leather Co., Justice McReynolds disagreed with the majority's interpretation of Section 113(a)(5) of the Revenue Act, which pertains to depreciation deductions. He argued that this section should not be interpreted as allowing a taxpayer to deduct from gross income an amount equal to depreciation on property used in trade or business, regardless of whether it was acquired through purchase or inheritance. According to him, such an interpretation would lead to unjust enrichment and double deduction benefits for taxpayers who inherit depreciable property because they could claim both a stepped-up basis at death and ongoing depreciation deductions during their ownership period. This view contradicts the principle that tax laws should be construed liberally in favor of taxpayers only when there is ambiguity about their application.