In the 1918 case Tempel v. United States, the Supreme Court ruled on a matter of tax law. The plaintiff, Tempel, had purchased land with valuable timber resources and sold off the timber separately from the land itself. He argued that he should only be taxed for income derived from his sale of timber rather than being taxed for both his sales of timber and land as if they were one entity. However, the court disagreed with this argument and held that under federal tax laws at that time, when property is bought in one form (in this case as combined land and timber) then separated into two forms (land without trees and cut down trees), it must still be considered as a single unit for taxation purposes regardless of how it was later divided or sold off by its owner.

In the dissenting opinion for Tempel v. United States, Justice Oliver Wendell Holmes Jr. argued that the majority's decision to uphold a tax on an inheritance from a foreign citizen was incorrect and inconsistent with previous rulings of the court. He contended that while Congress has broad powers to levy taxes, it does not have unlimited power and must respect principles of international law when doing so. In this case, he believed that taxing an inheritance left by a German citizen who had never lived or owned property in the U.S., simply because his heir happened to be living there at the time of his death, violated these principles. Furthermore, he pointed out inconsistencies between this ruling and prior cases where similar taxes were struck down as unconstitutional or invalid under international law.