In the case of Montgomery v. United States in 1895, the Supreme Court ruled on a matter concerning taxation and bankruptcy. The petitioner, Montgomery, had declared bankruptcy and his assets were distributed among his creditors. However, after this distribution was made but before he was officially discharged from bankruptcy, an internal revenue tax lien was placed on him by the government for unpaid taxes that predated his declaration of bankruptcy. The court held that while normally such a tax would be nondischargeable under federal law (meaning it could not be wiped out by declaring bankruptcy), because the tax claim arose before any notice of pending insolvency proceedings or actual insolvency itself occurred - it should have been included as part of those debts to be paid off through asset liquidation during said proceedings. Therefore, since all available funds had already been distributed amongst other creditors at time when this additional debt became known; there were no longer any resources left with which to satisfy it – effectively rendering this particular obligation uncollectible.

The dissenting opinion in the case of Montgomery v. United States argued that the court majority had erred in its interpretation of tax law and its application to this specific case. The dissent held that Mr. Montgomery, as a salaried employee of the government, should not be subject to income tax on his salary because it was not derived from any profit-making source or capital investment but rather from his personal labor and service to the country. They contended that taxing such salaries is equivalent to diminishing them, which contradicts Article 1 Section 6 Clause 1 of the Constitution prohibiting any decrease in compensation for services during an official's term. Furthermore, they believed there was no constitutional authority allowing Congress to levy taxes on judicial officers' salaries at all levels - federal or state - thus making such taxation unconstitutional.