In the 1983 case Hobby v. United States, the Supreme Court ruled that a federal law prohibiting sex discrimination in employment also applied to programs receiving federal financial assistance. The Department of Health and Human Services had cut off funding to Mississippi University for Women's nursing school because it refused admission to men, including Joe Hogan who brought this suit. The university argued that Title IX of the Education Amendments Act only prohibited discrimination on basis of sex in education programs or activities if such discrimination was intentional. However, the court disagreed with this interpretation and held that even unintentional systemic bias is covered under Title IX prohibitions against sex-based discrimination.

In the dissenting opinion for Hobby v. United States, the justice argued that Congress did not intend to exclude voluntary services from being considered as income under Section 61 of the Internal Revenue Code. The justice pointed out that there is no explicit exclusion in this section for such services and therefore they should be taxable. He also disagreed with the majority's interpretation of a previous case (Old Colony Trust Co.), arguing it was misapplied and its principles were not applicable to this case. Furthermore, he contended that if Congress had intended to exempt these types of benefits from taxation, they would have done so explicitly in legislation rather than leaving it up to judicial interpretation. Finally, he expressed concern about potential abuse if individuals could avoid taxes by receiving compensation through non-monetary means or disguised as gifts.