WILLIAM L. ULLMANN, N. GREGORY SILVERMASTER AND HELEN P. SILVERMASTER v. HARTFORD FIRE INSURANCE COMPANY, 87 N.J. Super. 409 (App. Div. 1965), May 3, 1965:

New Jersey, in common with most jurisdictions in which the question has arisen, has permitted discovery and inspection of income tax returns for good cause. Finnegan v. Coll, 59 N.J. Super. 353, 356 (Law Div. 1960); cf. Application of Frey, 26 N.J. Misc. 193 (O. & T. 1948); Annotation, 70 A.L.R.2d 240-265 (1960). However, the discovery and inspection of income tax returns presents special problems. As Judge Weinfeld said in Cooper v. Hallgarten & Co., supra:

“* * * Public policy favors the nondisclosure of income tax returns. Criminal sanctions for unauthorized disclosure underscore this policy. The courts are not altogether in accord as to whether or not this public policy has cloaked the returns with a privilege in favor of taxpayers who are litigants in private suits. But assuming that a litigant’s tax returns are not privileged and are subject to pretrial procedure, the public policy against disclosure cannot be ignored; it must be taken into account together with the policy which favors liberal pretrial discovery. Giving appropriate weight to each, the production of tax returns should not be ordered unless it clearly appears they are relevant to the subject matter of the action or to the issues raised thereunder, and further, that there is a compelling need therefor because the information contained therein is not otherwise readily obtainable. * * *.”

(34 F.R.D., at pp. 483-484)

The average taxpayer is sensitive about his return and wishes to keep it from publication. He is entitled to that privacy unless there is strong need to invade it. If disclosure will not serve a substantial purpose it should not be ordered at all. If ordered, disclosure should be no greater than justice requires. The disclosure of entire returns should never be ordered if partial disclosure will suffice, and in all but the clearest cases the return should be examined by the judge before any disclosure is ordered. Even then the judge should impose such restrictions and limitations as may be necessary for the protection of the taxpayer. Cf. 2 Schnitzer and Wildstein, N.J. Rules Service, supra, A IV-699; Annotation, 70 A.L.R.2d, supra, at p. 254.

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