Legal Definitions - tax-return privilege

Definition: Tax-return privilege is a legal right that allows a person to refuse to disclose the contents of their tax return or related documents. This privilege is based on the public policy of encouraging honest tax returns.

Example: John is being audited by the IRS and is asked to provide copies of his tax returns for the past three years. He can assert the tax-return privilege and refuse to disclose the contents of his tax returns.

Explanation: The tax-return privilege allows individuals to keep their tax informationconfidential and protects them from being forced to disclose it. This privilege is important because it encourages people to file honest tax returns without fear of their information being used against them. In the example, John can assert the tax-return privilege and refuse to disclose his tax returns to the IRS.