Tuesday, June 03, 2008
Tax Returns: Can Insurer Get Them? Recent Case
On June 2, 2008 the Colorado Supreme Court issued a decision which addresses the right of the insurer to compel the production of tax returns. It was not a workers compensation case but the issue of trying to obtain such records does come up in workers compensation cases too. So the decision is important whenever the insurer seeks your tax returns. As noted by the court tax returns contain much information about a person. Aside from income the returns disclose personal information, debt information, investment information and much more. Often it can be considered by a plaintiff or claimant attorney as a "fishing expedition" into a persons private life. In this case the insurer sought an order to compel the turnover of several years of records in an auto accident case. The order was granted and when it was appealed the highest Colorado court said the order was not proper. The burden is on the insurer to show the discovery of any tax returns is relevant to an issue and there is a compelling need which cannot otherwise be obtained elsewhere. Finding the order was overbroad the court sent it back for application of the test it set forth in its decision. Further it also can mean that even if the returns can be relevant and needed it can still mean limiting full disclosure of the returns. A Judge can edit the disclosure. So whenever a workers comp insurer seeks your tax returns this case may be important to the issue. Read it by clicking here.