In McGann v. United States (1959), the Supreme Court examined whether a taxpayer, who had been convicted of tax evasion and ordered to pay back taxes as part of his sentence, could deduct these payments from his income for subsequent years. The court ruled that he could not. The decision was based on the principle that fines and penalties are not deductible under federal tax law because they do not constitute an "ordinary and necessary" business expense or loss incurred in a trade or business activity. Furthermore, allowing such deductions would undermine the punitive intent behind criminal sanctions by effectively reducing their financial impact on offenders.

In the dissenting opinion for McGann v. United States, it was argued that the majority's interpretation of Section 641 of Title 18 was overly broad and inconsistent with its legislative history. The dissenting justices believed that this section should not apply to cases involving fraudulent schemes or false pretenses, as these were already covered by other statutes. They also disagreed with the majority's view that a government employee could be considered a "thing of value" under this law, arguing instead that such an interpretation stretched the meaning of this term beyond what Congress intended. Furthermore, they expressed concern about potential abuses and unfair prosecutions if Section 641 were interpreted so broadly. In their view, only tangible property or specific intangible rights (such as patents) should fall within its scope.