Short answer: Tax returns are often legitimately discoverable in business interruption and similar income-dependent claims. In purely residential dwelling-repair claims, the request may be overreach and should be questioned in writing.
When tax returns are legitimately relevant
- Business interruption (income history establishes loss calculation)
- Home office / home business claims
- ALE disputes involving income replacement
- Contents claims where high-value items need ownership/income context
When the request is questionable
- Simple residential dwelling claim
- No income-dependent component
- Request seems disproportionate
How to respond
- Request in writing the specific policy language authorizing the request
- Provide what's clearly relevant (e.g., Schedule C for a home business)
- Redact unrelated personal information
- Involve an attorney if the request escalates
Why this matters
Once provided, tax returns are in the claim file and may be used in ways beyond the immediate dispute. Produce thoughtfully.