## Facts

- John and Charlotte Dressler filed a 1967 federal income tax return claiming a parsonage (housing) allowance exclusion under I.R.C. § 107 based on John Dressler’s employment as a Methodist church “minister of music.”
- The IRS issued a notice of deficiency of $498.20 for 1967, disallowing the § 107 exclusion on the ground that John was not a “minister of the gospel” (including assertions that he was not ordained, commissioned, or licensed and did not perform required sacerdotal functions).
- The Dresslers petitioned the Tax Court for redetermination and elected to have the case conducted under the small tax case procedure in I.R.C. § 7463.
- The Commissioner objected to small-case treatment, arguing the § 107 question was important and lacked judicial precedent warranting a regular, appealable Tax Court decision.
- The Commissioner also contended the § 7463 dollar limitation should be exceeded by considering similar disputes for other tax years beyond 1967.
- The Tax Court addressed only the procedural question of eligibility for § 7463 treatment, not the substantive § 107 merits.

## Issues

1. Whether a taxpayer’s § 7463 small-case election may be denied when the deficiency in dispute for the year before the court is under the statutory dollar limit, based solely on the Commissioner’s view that the legal issue is important or novel.
2. Whether § 7463’s dollar limitation is measured only by the deficiency in dispute for the taxable year before the court, or may be satisfied by aggregating amounts from other tax years.

## Decision

- The Tax Court granted the Dresslers’ election to proceed under the § 7463 small tax case procedure.
- The court held the relevant dollar limitation is the deficiency placed in dispute for the single taxable year before the court (1967), which was $498.20 and within the statutory cap.
- The court rejected aggregation of actual or potential deficiencies from other years to defeat § 7463 eligibility for the year in dispute.
- The court rejected an extra-statutory “importance” or “novelty” exception as a basis to deny small-case treatment.
- The case was to proceed as a small tax case, producing a final, non-appealable, nonprecedential decision under § 7463(b).

## Legal Principles

- Under I.R.C. § 7463(a), small-case eligibility turns on “the amount of the deficiency placed in dispute” for “any one taxable year,” not on cumulative exposure across multiple years.
- The Tax Court will not deny a qualifying § 7463 election based solely on the Commissioner’s policy preference for a precedential, appealable opinion.
- Courts will not add discretionary limitations to § 7463 that are not supported by the statute’s text.
- A § 7463 decision is final, not reviewable by another court, and not treated as precedent for other cases.  

## Conclusion

The Tax Court permitted small-case treatment because the 1967 deficiency in dispute was below § 7463’s statutory limit and the statute does not authorize denying the election due to the perceived importance of the underlying legal question or by aggregating other-year deficiencies.


Dressler v. Commissioner, 56 T.C. 210 (1971)