If You Think That You Have a Right To Privacy In Your Tax Returns After a Case is Over, Think Again

Eric S. Solotoff for Fox Rothschild LLP writes:  In the typical divorce case, it is rare that parties are forced to turn their tax returns over to the other party year after year.  An exception to the general rule is when the support is being based upon some type of formula which requires income verification, but even then, the income is often, but not always, verifiable from other documents.  This is not to say that you never have to turn over tax returns post-judgment.  To the contrary, it is common, if not required, to do so when alimony and child support need to be modified, to determine college contributions, etc.

The unreported (non-precedential) case of Burkett v. Mejia decided on August 7, 2013 highlights another time when tax returns may be ordered.  In this case, the ex-husband twice defaulted on on his agreed upon alimony and equitable distribution obligations and owed more than seven figures to the ex-wife.  Because the this, the former wife requested and the court ordered him to provide his tax returns each year until his obligations were paid in full.  The ex-husband appealed, creatively arguing that the requirement violated his "legitimate expectation of privacy."   Because the husband claimed that he could not pay, this provision was granted because the trial judge found that the ex-wife should not have to wait longer than necessary for payments due her if defendant's ability to pay what he owed is enhanced.  The ex-husband appealed.

In affirming, the Appellate Division noted that the law is clear that income tax documents are not privileged and may be required to be produced, for good cause.  In this case, the defendant's complex finances coupled with his prior defaults were sufficient to support the trial court's decision.

So what is the take away from this case,  If you don't want to be forced to turn over your tax returns, you better meet your obligations.  In fact, one wonders whether, given the history of this case (a seven figure income during one of the years when payments were not being made), whether more frequent reporting requirements, if not a receiver or special fiscal agent, might have been appropriate under all of the circumstances.