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Florida

In the case Randall S. Appel v. Norman Bard and Shirley Bard, a Florida appellate court granted a taxpayer’s request to review a lower court’s order compelling him to answer questions as to whether he filed tax returns for the years 2005-2010. The court determined that the taxpayer should not be compelled to answer.

In attempting to execute a domesticated foreign judgment of more than $1 million against the petitioner, Appel, the respondents pursued discovery as to whether he had filed tax returns for the years at issue. Appel invoked his Fifth Amendment privilege against self-incrimination and refused to answer. He justified his refusal on two grounds:

  1. That the IRS could use his refusal against him in a future tax prosecution; and
  2. That his answers could “evoke a response forming a link in the chain of evidence which might lead to criminal prosecution.”

Agreeing with Appel, the court found that he “has shown a reasonable probability that the information might be used against him in a prosecution for failure to file and failure to pay his taxes.”

Ultimately, the court concluded that “[c]ompelling Appel to answer yes-or-no in response to whether he filed tax returns would be forcing him to admit or deny the very thing the government would be trying to prove in a federal tax prosecution…thus lowering the government’s burden.”

Pennsylvania

In the case Macdonald-Matthes v. PA Dept of Revenue, the Pennsylvania Office of Open Records (OOR) denied a lawyer’s appeal of a Department of Revenue’s (PADOR) denial of her request for the tax records of Chesapeake Design Building, LLC for the years 2008-2014. The main rationale for both denials was confidentiality under state law.

Under Pennsylvania’s Right to Know Law, the lawyer sought “[a]ll documents showing whether the company…is in compliance with the tax filing requirements of the Commonwealth of Pennsylvania for the years 2008 through 2014.” Though tax records that the PADOR possesses are presumed to be public, state law contains exceptions.

In its denial, the OOR acknowledged that the objective of the Right to Know Law is to “empower citizens by affording them access to information concerning the activities of their government…designed to promote access to official government information in order to prohibit secrets, scrutinize the actions of public officials and make public officials accountable for their actions.”

Even so, the OOR justified its denial on the basis of several state laws that make certain information pertaining to sales taxes, personal income taxes, and corporate net income taxes confidential, and that preclude the revelation of such information by state officials under some circumstances.

An appeal can be filed within 30 days of the decision.

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