When are tax returns privileged?

Useful Rulings on Tax Returns and Privilege

Recent Rulings on Tax Returns and Privilege

ROUGHAN & ASSOCIATES AT LINC, INC., A CALIFORNIA CORPORATION VS DEBORAH PERLMAN

Plaintiff argues that “Defendants are abusing the tax return privilege so that they may thwart discovery related to revenues earned by Perlman’s competing business and limit that category of damages.” (Id. at p. 12:1-2.) The deposition subpoena for production of business records seeks the following documents: “Document Request No. 11: All 1099's YOU issued to PERLMAN for years 2015-2018. Document Request No. 12: All 1099's YOU issued to RICHARDSON for years 2015-2018.” (Osborn Decl., Ex.

  • Hearing

    Jul 06, 2020

ROUGHAN & ASSOCIATES AT LINC, INC., A CALIFORNIA CORPORATION VS DEBORAH PERLMAN

Plaintiff argues that “Defendants are abusing the tax return privilege so that they may thwart discovery related to revenues earned by Perlman’s competing business and limit that category of damages.” (Id. at p. 12:1-2.) The deposition subpoena for production of business records seeks the following documents: “Document Request No. 11: All 1099's YOU issued to PERLMAN for years 2015-2018. Document Request No. 12: All 1099's YOU issued to RICHARDSON for years 2015-2018.” (Osborn Decl., Ex.

  • Hearing

    Jul 06, 2020

JENSEN V. VAN NOORD

The filing of an action seeking financial damages as alleged in this case amounts to circumstances indicating plaintiff intentionally waived the tax return privilege and the gravamen of the lawsuit is inconsistent with the privilege. Therefore, the claim of tax return privilege is overruled. When limited to the period of May 22, 2015 to the current date, the requests are not overbroad. In addition the requests are not vague and ambiguous and are not uncertain.

  • Hearing

    Jun 15, 2020

CP MARGUERITE MV, LLC VS. O’NEILL

The 11-22-2019 “meet and confer” letter of Attorney Kay (See Decl. of Kay¶8, Ex.7) does not address the objections and responses raised in the original objections (See Decl. of Kay, Ex. 2) such as Civil Code §3295(c), tax payer privilege, and attorney work product. Therefore, because there is an insufficient showing of good cause and an insufficient meet and confer prior to filing this motion, the motion is DENIED. The requests for sanctions by each party are DENIED. Defendants to give notice.

  • Hearing

    Mar 05, 2020

ARRIETA V. ASAS GROUP, INC.

In addition, the tax return privilege applies to corporations. Sav-On Drugs, 15 Cal.3d at 6-7. Plaintiff has shown her need for discovery to establish alter ego liability outweighs ASAS’ right to privacy in its financial records. ASAS’ privacy interest is protected through the parties’ stipulated protective order. With respect to the remaining requests, the Court orders that the motion is denied with respect to the edited requests set forth below.

  • Hearing

    Mar 02, 2020

JEREMIAH CASAS VS THE HOPS LLC, ET AL.

Plaintiff argues that tax returns are not discoverable subject to the taxpayer’s privilege. As Plaintiff has alleged lost wages, he is required to produce records reflecting his income for the years sought. However, his tax returns, and related tax documents (W-2s) are subject to the taxpayer’s privilege.

  • Hearing

    Feb 27, 2020

  • Judge

    Lori Ann Fournier or Olivia Rosales

  • County

    Los Angeles County, CA

BANK OF HOPE AS SUCCESSOR IN INTEREST BY WAY OF MERGER TO CENTER BANK AND BBCN BANK VS SHAHRAM RAY GOLBARI, ET AL.

This statutory tax return privilege is not absolute. The privilege will not be upheld when (1) the circumstances indicate an intentional waiver of the privilege; (2) the gravamen of the lawsuit is inconsistent with the privilege; or (3) a public policy greater than that of the confidentiality of tax returns is involved. (Ibid.) The third exception is narrow and applies only when warranted by a legislatively declared public policy. (Ibid.)

  • Hearing

    Feb 26, 2020

COTTONE V. COTTONE

As to RFP No. 4, Defendant has asserted the tax return privilege. Weingarten v. Superior Court (2002) 102 Cal.App.4th 268, 274, states, “But this statutory tax return privilege is not absolute. The privilege will not be upheld when (1) the circumstances indicate an intentional waiver of the privilege; (2) the gravamen of the lawsuit is inconsistent with the privilege; or (3) a public policy greater than that of the confidentiality of tax returns is involved. [Citation.]”

  • Hearing

    Feb 11, 2020

PEOPLE OF THE STATE OF CALIFORNIA V. PONG MARKETING AND

Still, the tax return privilege is not absolute. There are 3 exceptions: (1) intentional relinquishment; (2) when the gravemen of the lawsuit is so inconsistent with the taxpayer’s privilege as to compel the assertion that the privilege has been waived; and (3) when legislatively declared public policy favoring disclosure is greater than the confidentiality of tax return policy. Schnabel v. Superior Court (1993) 5 Cal.4th 704, 721.

  • Hearing

    Feb 07, 2020

JOHN LEVIN, TRUSTEE OF THE JOHN LEVIN M.D. PENSION PLAN VS. GARY M. LEEDS

The Court is not persuaded by Plaintiff's argument that Defendant waived her tax return privilege by not objecting to production of her tax returns until the conclusion of the judgment debtor examination. Plaintiff cites former CCP § 2025(m)(1) [now CCP § 2025.460(a) as amended 2005] governing depositions and former CCP § 2031(l) [now CCP § 2031.300(a) as amended 2005] governing requests for production of documents. Neither statute applies here.

  • Hearing

    Feb 06, 2020

  • Type

    Real Property

  • Sub Type

    other

JOHN LEVIN, TRUSTEE OF THE JOHN LEVIN M.D. PENSION PLAN VS. GARY M. LEEDS

The Court is not persuaded by Plaintiff's argument that Defendant waived her tax return privilege by not objecting to production of her tax returns until the conclusion of the judgment debtor examination. Plaintiff cites former CCP § 2025(m)(1) [now CCP § 2025.460(a) as amended 2005] governing depositions and former CCP § 2031(l) [now CCP § 2031.300(a) as amended 2005] governing requests for production of documents. Neither statute applies here.

  • Hearing

    Feb 06, 2020

  • Type

    Real Property

  • Sub Type

    other

CARDINAL COLLECTION VS MUSEUM OF GLOBAL

As to RFP 75, defendant admits that plaintiffs already have his tax return so he fails to justify the application of the tax return privilege. Nor does he offer any facts to support any privacy privilege or a finding that the RFP is unduly burdensome or overly broad. Specifically as to RFP 77, defendant makes no showing information would otherwise be protected from disclosure by a claim of privilege, and therefore support the application of the common interest doctrine.

  • Hearing

    Jan 31, 2020

HILLSBORO BROWN CAPITAL, LLC VS. TAFT

Nor have they demonstrated that they have standing to assert the tax return privilege. As to Request Nos. 34-41, the Motion is GRANTED, and the requests are MODIFIED as follows: · Limited in time from 2012 to present · Limited to communications referring to or regarding Central Partners Parent Group, Inc., CMX Distribution, Inc., Purple Mountain Holdings, Inc., ECS Laboratories, Inc., Brand Pack, LLC, and/or Toronto Way Partners, Inc. No sanctions.

  • Hearing

    Jan 21, 2020

LOUIS JONES, ET AL. V. CAPITAL ALLIANCE ADVISORS, INC., ET AL.

She intentionally interfered with plaintiff’s ability to obtain relevant information through legitimate means and then “sought to hide behind the tax return privilege to ensure no relevant information would be revealed.” (Id. at p. 275.)

  • Hearing

    Jan 16, 2020

  • Judge

    Presiding

  • County

    Santa Clara County, CA

FURRA V. PAPPAS, ET AL.

Superior Court (1976) 63 Cal.App.3d 825, 830 [plaintiff waived tax return privilege where she sued her accountants for “negligent and improper advice” and “computation and preparation of her taxes”].) The Court also finds that the request for the tax returns is improper, because the returns are the “product” of the deponent’s business, and not the “records” of the deponent’s business. (Urban Pacific Equities Corp. v. Superior Court, supra, 59 Cal.App.4th at pp. 692–693.)

  • Hearing

    Dec 13, 2019

SANDRA BUTCHER VS THE CROSSROADS SCHOOL FOR ARTS AND SCIENCE

Superior Court (2001) 87 Cal.App.4th 1072, 1082 [declining to hold that tax return privilege applied to “related” documents when party made “no effort to identify the allegedly protected documents, or explain with legal argument and pertinent authority why the tax return privilege should be extended to those materials”].)

  • Hearing

    Dec 11, 2019

  • Type

    Employment

  • Sub Type

    Wrongful Term

DONALD E HOLLINGSHEAD VS DEBRA L DUGGAN, ET AL.

The Plaintiffs are to produce a privilege log of the documents they have in their possession, and the privilege requested as to each document, including documents seeking protection by attorney-client privilege and tax return privilege.

  • Hearing

    Dec 04, 2019

NAZARYAN V. FEMTOMETRIX, INC.

Nazaryan has not shown that FemtoMetrix waived the tax return privilege or that FemtoMetrix can waive the privilege held by nonparties Marc Kryger and Tam Nguyen). Board of Trustees v. Superior Court (1981) 119 Cal.App.3d 516, 526 (disapproved on other grounds) Nazaryan has not shown the tax return privilege does not apply. In addition, there are other methods to obtain the information Nazaryan purports to seek without obtaining a copy of nonparties’ 1099s. Motion is denied. No sanctions are awarded.

  • Hearing

    Dec 02, 2019

SYED ALI HUSAIN ET AL VS WAUSAU BUSINESS INSURANCE COMPANY

But this statutory tax return privilege is not absolute. The privilege will not be upheld when (1) the circumstances indicate an intentional waiver of the privilege; (2) the gravamen of the lawsuit is inconsistent with the privilege; or (3) a public policy greater than that of the confidentiality of tax returns is involved. ( Schnabel v. Superior Court, supra, 5 Cal. 4th at p. 721.) This latter exception is narrow and applies only "when warranted by a legislatively declared public policy." (Ibid.)

  • Hearing

    Oct 23, 2019

  • Type

    Insurance

  • Sub Type

    Intellectual Property

ETC BAR INC. VS. PATHOMRIT

Superior Court (2017) 3 Cal.5th 531, 557, the burden is on “the party asserting a privacy interest to establish its extent and the seriousness of the prospective invasion, and against that showing must weigh the countervailing interests the opposing party identifies…” Courts have held that “confidential financial information given to a bank by its customers is protected by the right to privacy that became a part of the California Constitution after the judicial formulation of the tax-return privilege.”

  • Hearing

    Aug 29, 2019

JASON STEGER VS CSJ PROVIDENCE ST JOSEPH MEDICAL CENTER ET A

The court here determines that the tax return privilege has been appropriately asserted by plaintiff, except as to tax return documents already produced and disclosed in this litigation, and that the moving parties have failed to establish that the privilege has been waived with respect to any other tax materials, or otherwise should not be considered absolute under the circumstances.

  • Hearing

    Jul 26, 2019

ZACHARY J. MCDONALD VS. MIKE MCMILLAN, ET AL

Accordingly, the Court finds that the tax return privilege applies such that the motion is denied as to DPD No. 15. Because M&M has a justified claim of privilege, the Court must determine whether M&M’s response to No.15 provides sufficient factual information for Plaintiff to evaluate the merits of that claim of privilege. Here, the item expressly requests tax returns from 2016 to present and M&M asserts a privilege to withhold tax returns.

  • Hearing

    Jun 14, 2019

  • County

    Los Angeles County, CA

CARRILLO V. ESQUEDA, ET AL.

The documents requested are subject to the tax return privilege. Despite Plaintiff’s contention, he has not shown any of the Defendants waived the tax return privilege. The allegations in the Cross-Complaint do not take a position inconsistent with Defendants’ assertion of the taxpayer privilege. Plaintiff has not shown a public policy greater than that of confidentiality of tax returns is involved.

  • Hearing

    May 31, 2019

RACHEL BLANEY VS. XXXXXXXXXX, ET AL

For her part, plaintiff’ s counsel Holiday responded to the meet and confer letters stating: BSF is a dissolved corporation with no standing to assert a privilege to bar discovery, and no other defendant has standing to object on BSF’s behalf; and defendants have waived the tax return privilege. (Id. at pp. 16-19,) Despite several additional correspondence between counsel and meeting with a mediator, there were no concessions or documents produced.

  • Hearing

    May 24, 2019

ROMO & ASSOCIATES, INC. VS. AVR INVESTMENTS, LLC

Moreover, although not addressed by the parties, there is no indication that the taxpayer’s privilege has been waived, or that there is a public policy greater than that of confidentiality of tax returns. (See Weingarten v. Superior Court (2002) 102 Cal.App.4th 268, 274-275.) Given the Court’s mixed ruling, both parties’ requests for sanctions are denied.

  • Hearing

    May 09, 2019

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