McHenry v. Commissioner of IRS, No. 11-1239 (4th Cir. 2012)
Annotate this CaseThe government asserted that petitioner had participated in a tax avoidance scheme to take advantage of the lower taxes in the Virgin Islands. At issue was whether the Tax Court abused its discretion in denying the motion of the Virgin Islands to intervene in this case, which was filed in response to a notice of deficiency issued by the IRS to petitioner for not paying U.S. income taxes. Because Tax Court Rule 1(b) gave the Tax Court broad discretion in deciding whether and to what extent to follow Rule 24 governing intervention and because Rule 24 itself conferred broad discretion on a trial court, the court gave deference to the Tax Court's decision to deny intervention, reviewing for only a clear abuse of discretion. Because the Tax Court's concerns over the consequences of granting the Virgin Islands' motion to intervene were not unreasonable, the court found no clear abuse of the Tax Court's broad discretion.
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