In the case of Wilber National Bank of Oneonta, Administrator v. United States (1934), the U.S Supreme Court ruled in favor of the United States government. The issue at hand was whether or not a bank could claim deductions on its federal income tax for losses incurred due to loans made by it that had become worthless and uncollectible during the taxable year. The court held that under Section 234(a)(5) of Revenue Act 1921, such losses were indeed deductible from gross income if they became entirely worthless within the taxable year. However, only an identifiable event establishing worthlessness must have occurred within this period; mere gradual depreciation over time would not qualify for deduction.

In the dissenting opinion for Wilber National Bank of Oneonta v. United States, Justice Stone argued that the majority's decision was inconsistent with previous rulings and interpretations of federal tax law. He contended that a bank acting as an administrator or trustee should not be held liable for income taxes on interest earned from bonds owned by an estate it is administering, especially when those earnings are distributed to beneficiaries who are themselves subject to taxation. In his view, this constituted double taxation which he believed Congress did not intend in its legislation. Furthermore, he disagreed with the majority's interpretation of "income" under federal tax law and suggested that their broad definition could lead to unjust results in future cases.