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Must I Submit My TAX RETURNS to the COURT or to the OTHER PARTY?

Q. I have a hearing coming up involving my ex-wife's request to modify spousal and child support. I've received a letter from her attorney demanding I bring my 2010 tax returns to court. I don't want to produce these. I've always thought that these are confidential and that I cannot be made to produce them if I am not trying to borrow money or something like that. What are my rights?


A. The Revenue and Taxation Code sections 14251 and 19542 do declare that our income tax records are generally privileged from disclosure. However, in California that privilege does not bar production and consideration of your income tax records according to Family Code §3552 in proceedings involving any kind of support requests. They are always available in discovery proceedings prior to the hearing itself.

However, what I do recommend is an agreement with the other party or their attorney that while the records may be voluntarily exchanged that they be disposed of or returned after the hearing. Always redact your social security number. Note that Family Code §3665(b)

prohibits the other side from disclosing the contents of your tax returns to anyone except:
  • the court
  • the party's accountant
  • some other financial consultant providing assistance with the case
  • anybody else the court specifically approves

Of course, once you lose possession of them there is little practical way to enforce these limitations. This is a good reason to not simply hand them over in response to an informal request without safeguards in place.

Since you report that you were asked to bring them in a letter request rather than in response to a subpoena or some other form of discovery request that seek the returns prior to the hearing itself, you might hold on to them until the hearing. If they are to be discussed at the hearing (or if you don't exchange them before because no agreement can be reached on how to protect their confidentiality), then bring them but ask the court under FC section 3552(c) to seal them in the file if the court retains them, or to turn them back to you at the conclusion of the hearing. An advantage to you in handling it this way is that the other party won't have the benefit of reviewing them before the hearing, or have the prior opportunity to have them looked at by their expert.

Obviously, for parties who want to see the other side's returns they are better off obtaining them prior through a demand for production (assuming enough time exists since without a court order shortening time production demands don't have to be answered earlier than 35 days from the date of mailing), and receiving on the date of the hearing might justify asking the court to continue the matter to review them if they are complicated.

By the way, the rules are a little different if you file joint returns, or if your returns contain information that relates to a non-party like a new spouse or possibly a family corporation or LLC that you are only one of several participants of, since their information remains privileged and can only be produced under certain circumstances and using specific procedures - which is another Blog.


Thurman W. Arnold, III


Comments

John - You always want to cross out the social security information on your joint or sole return when giving it to the other side - and also be sure to redact it from your ex's returns if you submits those to the Court as well (i.e., never include a person's SS number in any exhibits you exchange in discovery or file with the court).

As to your question concerning whiting out your wife's current wife's capital gains, absent special findings per FC section 4057.5 your new wife's income is irrelevant. The only reason they can get anything at all about her is the fact that you filed jointly. My feeling on this is that the capital gains income information should be privileged as well, but an argument may exist that since it is presumptively community property it must be disclosed (to reflect your share). See my articles on new mate income. I will try to blog my views this week. In the meantime, you might decline to provide the unredacted return absent a judge's order, and offer to discuss the issue in court.
I appreciate your website, and I'm getting valuable information from your blogs. I have a question directly related to this member's. I file jointly with my current wife. When I had to provide my tax return to my ex, my wife insisted that I black out information on our tax return related to my wife's capital gains income. My ex's attorney (I am pro per) is stating that I can only cross out her SS# - and that the rest of the tax return has to be visible. I have searched the web for the rule on this, but cannot find it. Any advice you could provide would be great. Thank you!
I am representing myself and my exwife has an attorney. I filed a motion to reduce child support and she of course resisted. Her attorney has now sent me a demand and ispection of documents. Among other things she is asking for me to provide tax returns, CC staements and Bank statements for my small construction company that is a california corporation. Must I produce these? I am willing to provide my personal info but seems illegal for them to ask for corporate docs?