My husband worked overseas in 2003 for an American business.  His
company is asking for a copy of our 2003 Federal tax return.  Is this
legal?

http://www.kvia.com/Global/story.asp?S=437897

In interviewing prospective employees, there are a number of things an
employer is prohibited from asking the applicant. These include:

for a credit check, unless such information is used solely for
necessary job related purposes

http://www.uslegalforms.com/lawdigest/legal-definitions.php/US/US-EMPLOYMENT-APPLICATION.htm

(9) Other problem areas: Questions concerning whether an applicant has
friends or relatives working for the employer may be improper, if the
employer gives a preference to such applicants. Questions concerning
credit rating or credit references have been held to be discriminatory
against minorities and women. Questions concerning whether an
applicant owns a home have been held to be improper as being
discriminatory against minority members, since a greater number of
minority members do not own their own homes.

I appeciate the effort to help with this question.  I must not have
made the question clear.  He is not being interviewed for a job.  This
is the same company he has worked for for 20 years.  In 2003, he
worked in Ireland and paid taxes in both Ireland and the US.  They
wanted us to use their accounting firm but we elected to use our own
accountant.  Now his company is stongly asking for a copy of our US
return.  Can they do this and is my husband's job in jeopardy if we
don't comply?

Ordinarily an employer will request a copy of an expatriate employee's
tax return in order to perform a tax equalization.  Because of his
overseas assignment, he paid tax in both the US and Ireland.  The tax
equalization is designed to figure out how much extra the employee is
out of pocket because of the assignment.  Also, many companies adjust
compensation levels to accomodate the tax differential.

I have been familiar with expatriate taxation for over 20 years, and
it is very common to request a copy of the employee's tax return,
especially if it has not been prepared by the firm hired by the
employer.  In fact, if your return had been prepared by the employer's
designated tax preparer, employer likely would not have wanted or
needed the return itself.  Most expatriate tax programs have the
employer's preparer produce a report with the specific information
they need to do the tax equalization.

As to whether he can get fired, check his expat agreement if he signed
one.  My company's agreement includes very specific language regarding
tax return preparation and the information required to be provided.  
Good Luck!!

happytobeme

Hi happytobeme!

Thanks you for the information.  Now I get it!