In the United States v. La Franca case of 1930, the Supreme Court ruled on an issue related to tax evasion and bootlegging during Prohibition. The defendant, La Franca, was convicted for evading taxes on illegal alcohol sales. He appealed his conviction arguing that he could not be taxed for income derived from illegal activities as it would violate his Fifth Amendment right against self-incrimination. However, the Supreme Court rejected this argument stating that there is no constitutional immunity against taxation on unlawful gains; hence they must be included in gross income reported to IRS. Therefore, even though selling alcohol was illegal during Prohibition era (1920-1933), those who profited from it were still required to pay taxes on their illicit earnings.

In the dissenting opinion for United States v. La Franca, Justice Stone argued that the majority's interpretation of "income" was too narrow and inconsistent with previous rulings. He contended that gross income should include all gains derived from capital or labor unless explicitly excluded by law. In this case, he believed that payments received as a result of illegal activities (bootlegging) were indeed income and thus taxable under federal law. According to him, it did not matter whether these earnings came from legal or illegal sources; they still constituted an accession to wealth which is subject to taxation under the Sixteenth Amendment. Furthermore, he pointed out inconsistencies in how different types of unlawful gains are treated under tax laws based on the majority’s ruling - some being taxed while others aren't - creating what he saw as an arbitrary distinction without basis in statutory language or legislative intent.