In the case of O'Malley v. Woodrough et ux., 1938, the United States Supreme Court ruled that a federal income tax imposed on the salary of a sitting federal judge did not violate Article III, Section 1 of the U.S. Constitution which prohibits reducing compensation for judges during their term in office. The court held that this provision was intended to protect judicial independence by preventing Congress from using its power over salaries as leverage against judges and it does not prevent general changes to taxation law affecting all citizens including judges. This decision overturned Evans v. Gore (1920) where it had been previously held that such taxes were unconstitutional when applied to sitting judges.

In the dissenting opinion for O'Malley v. Woodrough, Justice James Clark McReynolds argued that the decision to uphold a tax on federal judges' salaries was unconstitutional and violated Article III of the Constitution. He contended that this article clearly states that judicial compensation should not be diminished during their time in office, which he believed included imposing taxes on their income. He further asserted that such taxation could potentially influence or coerce judges into making decisions favorable to those who control taxation - namely Congress - thereby threatening judicial independence and impartiality. In his view, allowing such a tax would set a dangerous precedent where other branches of government could exert undue influence over the judiciary through financial means.