In the case of United States v. Equitable Trust Company of New York et al., 1930, the U.S. Supreme Court was asked to determine whether a federal tax lien could take precedence over a mortgage lien that had been recorded prior to the enactment of the tax law creating such liens. The court held in favor of Equitable Trust Company, ruling that under common law principles, priority is generally given to whichever lien is first in time and first in right. Therefore, since Equitable's mortgage lien was recorded before Congress enacted legislation authorizing federal tax liens (and thus before any such tax liability could have arisen), it took precedence over later-arising federal tax claims against the same property.

The dissenting opinion in the case of United States v. Equitable Trust Company of New York et al., 1930, argued that the majority's decision to allow a tax deduction for losses incurred by a corporation due to depreciation was incorrect. The dissenters believed that this interpretation contradicted previous court decisions and went against the intent of Congress when it enacted the relevant tax laws. They contended that allowing such deductions would result in an unfair advantage for corporations over individual taxpayers who could not claim similar deductions. Furthermore, they expressed concern about potential abuse if corporations were allowed to determine their own depreciation rates without any oversight or regulation from government authorities.