In the case of United States v. Hougham et al., 1960, the U.S Supreme Court was tasked with determining whether payments received by a taxpayer from his ex-wife and children as part of a property settlement agreement could be considered taxable income under Section 22(k) of the Internal Revenue Code. The court ruled that these payments were indeed taxable income. This decision hinged on an interpretation of "periodic" in relation to payment schedules; it was determined that even though there wasn't a fixed schedule for payments, they were still made periodically and thus fell within the scope of Section 22(k). Furthermore, it held that any amount paid or transferred by one spouse to another under divorce or separation instruments is included in gross income if such instrument does not fix such amounts as payable for support and maintenance.

In the dissenting opinion for United States v. Hougham et al., Justice Whittaker disagreed with the majority's interpretation of Section 22(b)(9) of the Internal Revenue Code, which exempts from gross income any amount received through insurance as compensation for injuries or sickness. He argued that this provision should be interpreted to include amounts received in settlement of a claim arising out of personal injury, even if those amounts represented lost profits or earnings. In his view, such an interpretation would better align with Congress' intent to provide relief to individuals who have suffered personal injuries and would avoid creating inequitable distinctions between different types of damages awarded in personal injury cases. The justice also expressed concern about potential inconsistencies resulting from the Court's decision, noting that it could lead to differing tax treatments depending on whether a case was settled before trial or decided by a court after trial.