In the case of Lewellyn, Former Collector of Internal Revenue v. Frick et al., 1924, the Supreme Court was asked to determine whether a federal estate tax could be levied on property transferred by a decedent prior to death but with retained life interest. The decedent in question had created an irrevocable trust for his children and grandchildren but kept income from it during his lifetime. After he died, the government sought to include this trust in his gross estate for taxation purposes under the Revenue Act of 1918 which allowed such inclusion if transfers were made "in contemplation of death". The court ruled against Lewellyn (the collector), stating that there was no evidence that Mr. Frick's transfer was done in anticipation or contemplation of death; rather it appeared as part of a well-considered plan for disposing off his property before any immediate threat or expectation of demise existed. Therefore, these assets couldn't be included within taxable estate.

In the dissenting opinion for Lewellyn v. Frick et al., Justice McReynolds expressed his disagreement with the majority's decision to uphold a lower court ruling that allowed certain deductions from an estate tax return. He argued that these deductions, which were made on account of debts owed by the deceased and administration expenses, should not have been permitted under existing law. According to him, such allowances would only be permissible if they had been authorized by Congress in clear terms - something he believed was absent in this case. Furthermore, he contended that allowing these deductions could potentially lead to significant losses in revenue for the government due to reduced taxation income from estates.