In the 1959 case Hertz Corporation v. United States, the Supreme Court ruled on a tax dispute between Hertz Corporation and the federal government. The issue at hand was whether or not interest paid by J. Frank Connor, Inc., which later became part of Hertz Corp., to its shareholders in exchange for loans could be deducted from its taxable income as "interest" under section 23(b) of the Internal Revenue Code of 1939. The court held that these payments were indeed deductible as interest because they represented compensation for use or forbearance of money loaned to J.Frank Connor, Inc.. This decision clarified how certain types of shareholder loans should be treated for tax purposes.

In the dissenting opinion for Hertz Corporation v. United States, Justice Brennan argued that the majority's interpretation of Section 117(a)(1) of the Internal Revenue Code was incorrect. He believed that Congress intended to provide a tax benefit only to those taxpayers who actually bore the economic burden of property depreciation, not simply those with legal title. In this case, he asserted that Hertz did not bear any risk associated with ownership because it had passed on all costs and risks to its lessees through rental payments. Therefore, according to Justice Brennan's interpretation of congressional intent and statutory language, Hertz should not be entitled to claim a deduction for depreciation under Section 167(a). His view emphasized substance over form in interpreting tax laws.