In the United States v. Burton Coal Company case of 1926, the Supreme Court was tasked with determining whether a coal company could be held liable for taxes on coal that had been mined but not yet sold or used. The Burton Coal Company argued that it should not have to pay tax on this "stockpile" because it did not constitute income until it was actually sold or used in some way. However, the government contended that as soon as the coal was extracted from the ground and became part of Burton's inventory, it constituted taxable income regardless of whether or not it had been sold yet. In its decision, the Supreme Court sided with the government and ruled against Burton Coal Company stating that once an asset is produced and available for sale even if unsold at year-end, then such assets are considered accrued gross income subject to taxation under U.S law.

In the dissenting opinion for United States v. Burton Coal Company, Justice Holmes argued that the government should not be able to claim damages from a coal company for failing to deliver an agreed-upon amount of coal during World War I. He believed that because Congress had passed legislation allowing the President to requisition necessary materials for war efforts, it was implied that contracts could be broken if they interfered with these efforts. Therefore, he felt it was unjustifiable for the government to seek compensation when its own actions were responsible for preventing contract fulfillment. Furthermore, he disagreed with majority's interpretation of "war clause" in contract and contended such clauses are typically understood as excusing performance rather than creating liability upon failure due to war conditions or governmental orders.