In the case of United States v. Union Pacific Railroad Co., 1956, the U.S. Supreme Court ruled that a railroad company could not claim tax deductions for amounts paid into an employees' pension trust fund if it retained control over those funds and could reclaim them at any time. The court held that such payments did not constitute "ordinary and necessary" business expenses under Section 23(a) of the Revenue Act because they were contingent on future events and therefore did not represent definite, final costs to the company during the taxable year in which they were made. This decision clarified how businesses should account for their contributions to employee benefit plans when calculating their income taxes, ensuring that these contributions are only deductible when they truly represent an expense incurred by the business.

In the dissenting opinion for United States v. Union Pacific Railroad Co., it was argued that the majority's decision to allow the government to recover lands granted by Congress to Union Pacific Railroad Co. in 1862, but not used for railway purposes, was incorrect. The dissenters believed that this interpretation of the law contradicted its original intent and historical practice. They pointed out that since 1841, Congress had been granting public land as an incentive for companies like Union Pacific to build railroads and other infrastructure projects crucial for westward expansion; these grants were never intended solely or primarily as a means of providing right-of-way through public lands but also aimed at aiding railroad construction financially. Therefore, they contended that if any part of such grant remained unused after completion of a project, it should rightfully belong to the company rather than revert back to government ownership.