In the case of Shannahan et al., Trustees, v. United States et al., 1937, the Supreme Court was asked to determine whether a federal tax lien had priority over a state court appointed receiver's claim on assets from an insolvent corporation. The corporation in question had failed to pay its federal taxes and subsequently went bankrupt. A receiver was appointed by a state court to manage the remaining assets and distribute them among creditors according to their respective priorities as determined by state law. However, under federal law, unpaid taxes are given first priority for payment out of an insolvent debtor's estate. The Supreme Court held that when it comes to competing claims on an insolvent debtor's property between a federally created lien (in this case for unpaid taxes) and a claim arising under state insolvency laws (the receiver), the former has precedence regardless of which came first chronologically or whether there is enough money left after paying off the federal debt for other creditors. This decision affirmed that Federal tax liens have supremacy over conflicting interests in property even if those interests were acquired before notice of the tax lien was filed.

The dissenting opinion in the case of Shannahan et al., Trustees, v. United States et al., 1937, argued that the majority's decision to uphold a tax on dividends from corporate earnings was incorrect. The dissenters believed this constituted double taxation and violated principles of fairness and equity. They contended that corporations are separate entities from their shareholders; therefore, taxing both for the same income is unjustifiable. Furthermore, they disagreed with the majority's interpretation of "income" under Sixteenth Amendment as including dividends derived from corporate profits already taxed at source level. This view held by dissenters emphasized respect for property rights and individual liberty against government intrusion through taxation.