The case of McCoach, Collector of Internal Revenue v. Insurance Company of North America in 1916 revolved around the issue of taxation on insurance companies. The Insurance Company argued that it was exempt from certain taxes under a statute which stated that mutual insurance companies were not subject to tax if their income did not exceed $5,000 per year. However, the government contended that this exemption only applied to purely mutual companies and not those who also conducted business for profit like the defendant company. The Supreme Court ruled in favor of the government stating that Congress intended to tax all profitable businesses regardless if they had some characteristics similar to a mutual company or cooperative society. Therefore, even though part of its operations involved policyholders receiving dividends (a characteristic associated with mutual insurers), because it operated as a commercial enterprise seeking profits too, it could be taxed accordingly.

The dissenting opinion in the case of McCoach v. Insurance Company of North America argued that the majority's interpretation was incorrect and that it failed to properly apply the law as intended by Congress. The dissent believed that insurance companies should not be taxed on income derived from tax-exempt securities, arguing this would amount to double taxation which is against principles of fairness and equity. They contended that taxing these companies on such income contradicts legislative intent, as Congress had specifically exempted certain types of securities from taxation with a view towards encouraging investment in them. Thus, they felt the majority ruling undermined this policy objective by indirectly taxing these very same securities through their earnings for insurance companies.