In the case of Cornelius P. Young, et ux. v United States in 2001, the Supreme Court ruled on a tax dispute involving Mr. and Mrs. Young who were seeking to deduct losses from their income taxes related to their horse breeding business which they claimed was for profit-making purposes but had not made any profits for several years running. The IRS disallowed these deductions arguing that this activity was not engaged with an intent to make a profit as required by Section 183 of the Internal Revenue Code (IRC). The Tax Court agreed with the IRS's decision and held that Mr. and Mrs.Young did not engage in their horse-related activities with an objective of making a profit under IRC §183(c), thus denying them loss deductions against other income sources. The Supreme Court affirmed this ruling stating that whether or not an activity is engaged in for profit is determined by examining all facts and circumstances regarding it; no single factor being decisive alone - including profitability over time or lack thereof.

In the dissenting opinion for Cornelius P. Young, et ux. v. United States, Justice Stevens argued that the majority's decision was inconsistent with previous rulings and failed to respect Congress' intent in drafting tax laws. He contended that a taxpayer should not be penalized for failing to pay estimated taxes if they had no reason to anticipate owing such taxes at the time of filing their return. In this case, he believed that Mr. Young could not have foreseen his liability because it resulted from an unexpected change in law after he filed his return but before his payment was due - thus making him unable to avoid underpayment penalties through quarterly payments or withholding adjustments as suggested by IRS guidelines and regulations.