In the United States v. Moore et ux., 1950, the Supreme Court ruled on a case involving income tax evasion. The defendants, Mr. and Mrs. Moore, had failed to report profits from their illegal gambling operation as taxable income in their federal returns for several years during World War II. They were subsequently charged with willful attempts to evade or defeat taxes under Section 145(b) of the Internal Revenue Code and convicted by a jury trial in District Court. The Moores appealed this decision arguing that they could not be taxed on money earned illegally since it would violate their Fifth Amendment right against self-incrimination; essentially claiming that reporting such earnings would admit guilt to an unlawful activity. However, the Supreme Court rejected this argument stating that there is no constitutional right protecting individuals from having illicitly gained income exempted from taxation nor does declaring such earnings equate to admitting criminal behavior under law enforcement scrutiny beyond tax purposes. Therefore, regardless of how one's income is obtained - legally or illegally - it must still be reported for taxation purposes without infringing upon any constitutional rights against self-incrimination.

In the dissenting opinion for United States v. Moore et ux., Justice Frankfurter disagreed with the majority's interpretation of Section 22(a) of the Internal Revenue Code, arguing that it did not support their conclusion that embezzled funds constitute taxable income. He contended that this provision was intended to tax only those gains which were realized and recognized under conditions where a taxpayer has complete dominion over them. In his view, an embezzler does not have such control as he is always at risk of being forced to return these funds if discovered. Furthermore, he argued against equating unlawful gains with lawful ones in terms of taxation since they are fundamentally different in nature and treatment under law. Lastly, he expressed concern about potential injustices resulting from taxing individuals on money they may ultimately be required to repay.