Exchanging tax information is necessary during a divorce, but most people are unaware that they may need to turn over tax records to the other party even after a divorce. While it's not required on a yearly basis, the exchange of tax information is normally required when one side requests for modifications to the current alimony and/or child support amount. Determining support for older children, such as college expenses, may also trigger the need to turn over tax documents.
The exchange of personal information after divorce has always been a dilemma for the courts, who must decide what is absolutely necessary to turn over based on the law, as well as legal principles such as the best interests standard. The absolute necessity of tax information is an important consideration, since there are other ways to verify one's income. It's also fair to say that access to the other party's information should be limited as much as possible after the dissolution of a marriage.
However, additional documentation may be needed when someone continues to miss payments, or insist on claims that cannot be substantiated from the available information. Even from a strictly ethical point of view, dissolving the bonds of marriage doesn't cut off all ties when one shares children and/or support obligations. Hence, even who you date might be an issue if that person's character, profession, etc., may go against what the court determines to be in your children's best interests.
While the aforementioned example is especially personal, tax information is a gray area when it comes to privacy rights. There was a case in 2013, Burkett v. Mejia, in which an ex-husband argued against turning over his tax records because it violated his “legitimate expectation of privacy”. Unfortunately, both the trial and appeals court pointed out that the law allows for tax documents to be overturned at the court's discretion. The court must, however, have good cause for doing so, which in this case involved the defendant's claim that he was unable to pay. By the time the defendant made this claim, he had defaulted twice on his support and property division obligations – an amount that totaled over 7 figures. The combination of these factors was enough for the courts to require that he turn over his tax returns every year until the obligations were paid in full.
As you can see, the exchange of information is one of those marital obligations that may continue long after the divorce. It may seem like an invasion of privacy, but modifying an existing court order requires evidence such as tax documents. That doesn't mean that you should automatically turn over everything that your former spouse demands. The exchange of financial, or any other important documentation should be done through your attorney, or at least after consulting an experienced attorney on your rights and legal options. For more information on the exchange of financial documents after a divorce, please speak with the attorneys of Villani & DeLuca, P.C.