In the United States v. Wood case of 1936, the Supreme Court ruled on a matter involving income tax evasion. The defendant, Mr. Wood, had been convicted for evading taxes by not reporting certain income he received from his employer in 1920 and 1921 as part of an agreement to purchase stock at less than its actual value. He argued that this was not taxable income but rather a return on capital investment because it resulted from selling shares he bought through exercising options granted by his employer. The Supreme Court disagreed with Mr. Wood's argument and upheld his conviction, ruling that the difference between what he paid for the stocks and their fair market value when they were sold constituted taxable income under federal law at that time (Revenue Act of 1918). This decision clarified how stock option benefits are treated for taxation purposes - as ordinary compensation subject to regular income tax rates rather than capital gains.

In the dissenting opinion for United States v. Wood, Justice Cardozo disagreed with the majority's decision to uphold a conviction based on evidence obtained through wiretapping. He argued that such methods violated an individual's Fourth Amendment rights against unreasonable searches and seizures. According to him, privacy was not limited to tangible items but also extended to intangible ones like conversations and thoughts; hence they should be protected from unwarranted intrusion by law enforcement agencies. Furthermore, he contended that allowing such practices would lead down a slippery slope where any form of surveillance could be justified in the name of crime prevention or detection which would ultimately undermine civil liberties and constitutional protections.