Investigation of accountancy firm did not create a situation of undue contractual influence on the taxpayers, as some had multiple advisors, and some were sophisticated business professionals; the accountancy firm notified the taxpayers of the investigation in a manner that allowed for outside advice on at least some of the relevant transactions.
For purposes of determining whether the partnership was a sham, while the correct business purpose test is distinct from the court's intent-based test, the two are not mutually exclusive, since intent is necessary to prove business purpose. The transaction had no practical economic effects other than the creation of intentional artificial tax losses.
Tax court's refusal to allow intervenor is reviewed for clear abuse of discretion, given the broad FRCP rule and the court's procedural discretion. Denial of intervention of right or denial of permissive intervention would both have been appropriate, given the existing representation of interests.