City Has No Right To Request Tax Returns Of Police Officers, Firefighters

The City of Cleveland, Ohio had a residency requirement for its police officers and firefighters. Though a recently-enacted Ohio statute calls that residency requirement into question, for many years the City enforced the residency requirement through its disciplinary system.

Ever since the residency requirement has been in effect, the City has directed municipal employees to prove their bona fide residency in Cleveland. As an initial part of the residency investigation, employees received a document request which required employees to submit completed Form 1040 tax returns as “actually filed with Federal, State and Local Income Tax agencies.”

If employees did not submit their tax returns, their cases could be referred to a Civil Service Commission referee before whom the employees would have to prove their city residency by a preponderance of the evidence. If the Commission was satisfied with the documentation, no further disciplinary proceedings were instigated.

The Association of Cleveland Fire Fighters brought a lawsuit against the City alleging that the requests for tax returns violated the right to privacy of their members. The Cleveland Police Patrolmen’s Association later intervened in the lawsuit on the side of the Association of Fire Fighters.

A unanimous Ohio Supreme Court held that the request for tax returns constituted an “abuse of municipal corporate power.” The Court found that the tax returns were covered by the right to privacy. The Court noted that both federal and Ohio law placed “strict limits on the ability of federal and state employees who have access to tax returns and tax-return information on disclosing that information. The United States Code actually describes the tax-return information as ‘confidential.’”

The Court concluded that “the recognition in the United States Code and the Ohio Revised Code that the tax returns are to be treated in extreme confidence creates an expectation of privacy in them. Both parties acknowledged that the tax returns represent significant insight into the properties, assets, family history, employment history, and unrelated business relationships of all individuals covered by the returns. The comprehensiveness of the information is precisely the point: Tax returns reflect intimate, private details of an individual’s life.”

The Court was ultimately unconvinced as to why the City actually needed employees’ tax returns. As put by the Court, “the City fails to sufficiently explain how a residency investigation will be hampered without the tax returns. The employee is already required to submit significant additional documentation in support of residency. Moreover, at that point in the process, the Civil Service Commission has yet to exercise its full investigative powers, including the use of subpoenas.”

State ex rel Fisher v. City of Cleveland, 845 N.E.2d 500 (Ohio 2006).

This article appears in the December 2006 issue