Currier v. Allied New Hampshire Gas Co.

• Decision Date: 31 December 1957
• Citation: 70 A.L.R.2d 237,137 A.2d 405,101 N.H. 205
• Parties: , 70 A.L.R.2d 237, 1 A.F.T.R.2d 1822, 58-2 USTC P 9607 Joseph Robert CURRIER et al. v. ALLIED NEW HAMPSHIRE GAS CO.
• Court: New Hampshire Supreme Court

Page 405

137 A.2d 405

101 N.H. 205, 70 A.L.R.2d 237, 1 A.F.T.R.2d 1822,

58-2 USTC P 9607

Joseph Robert CURRIER et al. v. ALLIED NEW HAMPSHIRE GAS CO.

Supreme Court of New Hampshire.

Argued Dec. 3, 1957.

Decided Dec. 31, 1957.

Fisher, Parsons & Moran and Harold D. Moran, Dover, for plaintiffs.

Burns, Calderwood, Bryant & Hinchey and Donald R. Bryant, Dover, for the defendant.

KENISON, Chief Justice.

The question presented in these tort actions for damages for personal injuries and property damage is whether the plaintiffs' federal income tax returns may be subject to discovery by the defendant. There is no precedent in this state and there is a surprising dearth of appellate authority in other state and federal jurisdictions. Compare, June v. George C. Peterson Co., 7 Cir., 155 F.2d 963, holding that federal income tax returns are subject to discovery in civil litigation, with Peterson v. Peterson, 70 S.D. 385, 17 N.W.2d 920, holding that they are privileged and not subject to discovery.

The Internal Revenue Code of 1954 (26 U.S.C.A. § 6103(a) and the former 1939 Code (26 U.S.C.A. § 55) provides that federal income tax returns 'shall constitute public records' which are open to inspection only to the extent authorized and approved by the applicable rules and regulations. Annotation 151 A.L.R. 1049; 8 Mertens The Law of Federal Income Taxation (Zimet rev. 1957) s. 47.55. Disclosure of the tax returns contrary to law is a misdemeanor. 26 U.S.C.A. § 7213. The Code of Federal Regulations provides in part that an individual tax return may be inspected by him or his attorney in fact. 26 CFR (1949 ed.) s. 458.52, and that a copy of the return may be furnished to any person who is entitled to inspect it. 26 CFR (1957 supp.) s. 458.205.

'The greater number of decisions favor the view that in private civil litigation a party may be required to produce copies of his Federal income tax returns.' McCormick, Evidence, s. 149, p. 312 (1954). Commentators generally have stated that the purpose of the Internal Revenue Code was to prevent wholesale disclosure of income tax information to persons who have no legitimate interest therein, but in actions for damages, where loss of earnings is an issue, income tax returns may be relevant and subject to inspection. 8 Mertens, The Law of Federal Income Taxation (Zimet rev. 1957) s. 47.53; 2 Barron & Holtzoff (1957 supp.) Federal Practice and Procedure, s. 798; 3 Prentice-Hall, Federal Taxes, par. 17,934 (1958). A majority of the courts 'have held that copies of income tax returns in the possession of a party are not privileged, and that their production can be compelled in an appropriate case, and further that if the party does not have copies he can be required to secure copies from the Internal Revenue authorities.' 4 Moore, Federal Practice (2d ed.) s. 26.25, pp. 1168, 1169. There is a dwindling minority view to the contrary, but recent cases have followed the majority view. Kingsley v. Delaware, Lackawanna & Western R. Co., D.C., 20 F.R.D. 156; Court Degraw Theater v. Loew's, Inc., D.C., 20 F.R.D. 85; 10 Vand.L.Rev. 150 (1956).

We adopt the majority view that federal income tax returns are not privileged...