In the United States v. Pleasants case of 1938, the Supreme Court dealt with a dispute over inheritance tax. The issue arose from an estate left by a decedent who had made inter vivos transfers to his children and grandchildren during his lifetime. These transfers were done in trust for them but retained income interest for life, which was taxable under federal law at that time. However, after his death, it was discovered that he had not paid any gift taxes on these transfers as required by law. The government sought to collect these unpaid taxes from the beneficiaries of the trusts rather than from the estate itself because they argued that this money should be considered part of their gross estates upon their deaths since they received income benefits while alive. However, in its ruling, the Supreme Court disagreed with this interpretation and held that such property transferred during one's lifetime is not subject to taxation as part of one's gross estate upon death unless there are specific provisions stating otherwise in existing laws or regulations.

The dissenting opinion in the United States v. Pleasants case argued that the majority's decision was inconsistent with previous rulings of the court and violated principles of fairness. The dissenters believed that Mr. Pleasants should not be held liable for tax evasion because he had no knowledge or reason to believe his income was taxable under federal law at the time it was earned, as it came from state bonds which were then exempted from taxation by a statute passed after he received them. They contended that retroactively applying this new law to tax previously exempt income constituted an ex post facto application of law, violating constitutional protections against such actions. Furthermore, they pointed out inconsistencies between this ruling and prior decisions where taxpayers were allowed refunds when laws changed after taxes were paid; if taxpayers could benefit from changes in tax laws after payment, they reasoned, they should also be protected from harm due to these changes.