In the United States v. Shaw case of 1939, the Supreme Court ruled on a matter concerning federal estate tax law. The issue at hand was whether or not an inheritance that had been left to a widow could be taxed by the U.S government if it had already been subjected to British death duties. The decedent, who was domiciled in England but held assets in both countries, left his entire estate to his wife and made no provision for payment of taxes out of principal. In its decision, the court upheld that under existing legislation (Revenue Act), U.S federal authorities were entitled to impose their own taxation on top of what had already been levied by Britain's death duty system - effectively allowing double taxation on inherited wealth from abroad. This ruling clarified how international estates should be handled with respect to American tax laws.

The dissenting opinion in the United States v. Shaw case argued that the majority's decision to allow a tax on an estate based on its gross value, including property located outside of the U.S., was incorrect. The dissenting justices believed this interpretation of the law went beyond what Congress intended when it enacted legislation regarding estate taxes. They contended that Congress only meant for domestic assets to be taxed and not foreign ones, as they were not within U.S jurisdiction or control at death time. Therefore, they felt that taxing such properties amounted to extraterritorial application of American laws which is generally avoided unless explicitly stated by Congress. Furthermore, they expressed concern about potential international conflicts arising from attempting to impose U.S taxes on property situated abroad.