NJ Appellate Division remands for a “more robust application” of Ullmann test in light of discovery demands seeking the production of business entity tax returns.

This matter involved a discovery dispute in a wrongful discharge employment matter. During discovery, the plaintiff sought the production of the tax returns and financial statements of his former employer, a closely-held corporation. During motion practice, the plaintiff argued that the test articulated in Ullmann v. Hartford Fire Insurance Company, 87 N.J. Super. 409 (App. Div. 1965), which sets forth a “rigorous set of standards” for the production of income tax returns, is not applicable to a business entity. The trial court approved of this reasoning and also found that the plaintiff, nonetheless, satisfied the Ullmann test. 

On appeal, the Appellate Division found that “the tax filings of corporations and other businesses receive the same presumption of confidentiality as individual tax records, and that the Ullmann test applies to them as well.” The court further found that the trial court did not adequately apply the heightened standard articulated in Ullman and remanded for a “more robust application of this standard[,]” in addition to whether the disclosure of non-tax financial records is warranted. 

In light of this decision, defense counsel should be cognizant of the heightened standard which applies to the production of corporate tax returns. 
 

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