Coffey v. Commissioner of IRS, No. 11-1362 (8th Cir. 2011)
Annotate this CaseAppellee received a notice of deficiency from the IRS and she contested the assessments, asserting the time bar in 26 U.S.C. 6501(a). Claiming an interest in this issue, the government of the United States Virgin Islands (USVI) sought to intervene, either as of right under Civil Rule 24(a)(2), or permissively under Civil Rule 24(b)(2). The tax court denied intervention and the USVI appealed. The court concluded the USVI had standing to intervene where the IRS did not dispute the last two elements of standing, causation and redressability, and where the USVI had presented sufficient evidence of an injury in fact. The court also held that the tax court abused its discretion by using an incorrect legal standard to deny permissive intervention where the tax court erred by ignoring the principal consideration of whether the USVI's intervention would cause undue delay or prejudice. Accordingly, the judgment of the tax court was reversed.
Court Description: Civil case - Federal Tax. In action involving taxes owed by a resident of the U.S. Virgin Islands, the district court erred in denying the U.S. Virgin Islands' motion to intervene as the Virgin Islands has a legally protected interest in its ability to create and effectively administer an effective economic development program, and the Tax Court's decision in this matter would concretely affect the program and create an injury in fact; reversed and remanded for further proceedings.
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