Why does a insurance need my tax return for the last 3 years?

Question

I was in a car accident, it was clearly the other drivers fault, the other drivers insurance company has requested my last 3 years tax return, why?

Answer 1

So they can sue your ***

Answer 2

If you have filed suit against the other driver and you are seeking loss of income, they would want to verify the loss of income by comparing your returns. If you have not initiated such a suit, I would ask them why they are requesting them. Watch it, insurance companies are sneaky and will try anything to punch holes in your case. I strongly suggest you seek legal counsel on this.

Answer 3

Hmmm.  I think the best answer is to contact YOUR insurance company, and ask their advice.  If YOUR insurance company won't talk to you, talk to a lawyer.

If you were seriously injured, they may need your tax return to determine the appropriate amount for a lost wages claim.  I'd want to make sure that THEY (the other driver's insurance company)  concede fault before giving them any information not approved by your lawyer or YOUR insurance company.  

As there also seems to be a lack of trust between their insurance company and you, perhaps it would be better if you wrote out a 4506-T or 4506 form so they could order the return directly from the IRS, rather than having to trust you.