In the case of Kreznar et al. v. United States in 1963, the petitioners were a group of taxpayers who challenged their income tax assessments by arguing that they should be allowed to deduct losses incurred from selling property below its fair market value to a corporation controlled by them. The Supreme Court ruled against the petitioners, upholding an earlier decision made by the Tax Court and affirmed by the Ninth Circuit Court of Appeals which disallowed these deductions. The court's ruling was based on Section 24(b) of Internal Revenue Code (1939), which prohibits recognition of loss from sales or exchanges between certain entities such as individuals and corporations where more than 50% in value is owned directly or indirectly by or for such individual(s). This provision aims at preventing manipulation through artificial losses created within closely held economic units. Therefore, even though there was no fraudulent intent involved with this transaction, it fell under prohibited transactions due to existing law provisions designed to prevent potential abuse situations involving related parties' transactions.

In the dissenting opinion for Kreznar et al. v. United States, it was argued that the majority's decision to uphold a conviction based on evidence obtained through warrantless wiretapping violated Fourth Amendment protections against unreasonable searches and seizures. The dissenters contended that this interpretation of the law would allow government intrusion into private communications without sufficient justification or oversight, thereby undermining citizens' rights to privacy and due process under law. They also expressed concern about potential abuses of power by authorities who might use such surveillance methods indiscriminately or maliciously, arguing that constitutional safeguards should not be so easily dismissed in favor of expediency or convenience in criminal investigations.