In the case of United States v. Pioneer American Insurance Co., the U.S Supreme Court addressed a dispute over federal tax liability for insurance companies that had received wartime dividends from other corporations. The Internal Revenue Code stipulated that 85% of such dividends were to be excluded from gross income, but this provision was later repealed by Congress in 1950. However, several insurance companies argued they should still receive the exclusion because their taxable years began before the repeal took effect and ended after it did so. The court ruled against these companies, stating that when a taxable year begins under one law and ends under another due to an intervening amendment or repeal, each day is governed by the law as it existed on that day unless there's clear congressional intent otherwise. Therefore, since no such intent was found here regarding dividend exclusions for insurance firms' wartime profits, these entities were liable for taxes on those earnings without any exemption.

In the dissenting opinion for United States v. Pioneer American Insurance Co., Justice Harlan argued that the majority's decision was inconsistent with established principles of federal tax law and policy. He contended that allowing a taxpayer to deduct from gross income amounts paid as insurance premiums, only to later include in gross income any amount received under such an insurance contract, would result in a "double deduction" not intended by Congress when it enacted Section 165(a) of the Internal Revenue Code. Furthermore, he believed this interpretation could lead to potential abuse by taxpayers who might be incentivized to over-insure their property or take out multiple policies on the same risk. Finally, Justice Harlan expressed concern about how this ruling could affect future cases involving similar issues and urged his colleagues on the bench to reconsider their position.