The case of Turnbow et ux. v. Commissioner of Internal Revenue in 1961 revolved around the issue of income tax deductions related to business expenses. The petitioners, Mr. and Mrs. Turnbow, were owners and operators of a cattle ranching business who claimed certain expenditures as deductible business expenses on their federal income tax return for the year 1955-56 which included costs incurred for feed, labor, veterinary services etc., along with depreciation on their livestock herd. However, the Commissioner disallowed these deductions arguing that they were capital investments rather than ordinary and necessary business expenses under Section 162(a) or allowable depreciation under Section 167(a) of the Internal Revenue Code (IRC). This resulted in an increased deficiency assessment against them. Upon review by Tax Court it was held that such expenditures constituted capital investments made towards increasing value or extending useful life span of assets i.e., livestock herds; hence not deductible as regular operating expense but subject to allowance for depletion over time. This decision was appealed before Supreme Court where it upheld Tax Court's ruling stating that such costs are indeed part-and-parcel of investment into breeding herd thus should be capitalized instead being treated as current operational expenditure.

In the dissenting opinion for Turnbow et ux. v. Commissioner of Internal Revenue, it was argued that the majority's decision failed to consider an important aspect of tax law: its purpose is not only to collect revenue but also to encourage certain economic behaviors beneficial to society as a whole. The dissenting justices believed that by denying taxpayers the ability to deduct losses from their investment in oil and gas wells, the court was discouraging investments in domestic energy production - something Congress had sought to promote through favorable tax treatment. They contended that such deductions should be allowed even if there were no immediate income offset because they represented real economic losses suffered by taxpayers who took on significant risk in investing in these ventures. Furthermore, they disagreed with the majority's interpretation of "gross income," arguing instead for a broader definition which would include potential future profits from successful wells.