An employer may demand proof of filing a return, which is common practice in some situations. BUT they are not entitled to view the contents of your return. They can not view it without your permission.
This is not the normal way to prove a child is a dependent. A child's birth certificate is normally all that is required.
A definition of child or dependent is normally determined by the insurance carrier. Most but not all insurance carriers follow the IRS rules on what is a dependent or child. For example. The IRS allows a parent to claim a child until age 24 if enrolled in a full time college, and if residing with the parents. Time spent away at school is considered time living with the parents. Most insurance companies will follow the IRS and allow children enrolled in school to continue to be covered until age 24.
1. The employer can ask for a copy of the return, if he or she feels that is what is needed to prove dependency. However this is not the normal reasonable practice.
2. The employer does not have a legal right to view the contents of your return, but has a right to get proof of filing and meeting your tax obligation. There is a special form the IRS gives form that provides that information without revealing the contents of your return. this is a common practice especially when an employer is bonding employees.
About the IRS definition: the so called statutory fabrication as you call it is in fact based on a persons legal or financial obligation to care for a person, whether voluntarily or not. It is based on a person actually having to spend resources to maintain a home and support a person, legally or voluntarily. Most insurance companies follow the IRS rules for dependency, a few are more liberal, and a few are more restrictive.
The big issue here that should be asked, is not if the employer has the right to demand the copy of the return. They have a right to ask, and if you show it, then they can view it; and you do not have to show a copy.
You can offer other proof of dependency, and the employee may or may not accept it.
The big question is: can the employer deny medical coverage to your dependents if you do not show a copy of the tax return?
The question phrased as I put it, is an employment law question.
IN most instances, if the employer asks for the same evidence from all employees, then it is legal; they can not discriminate.
On the other hand, if an employee offers alternative evidence of dependency, and the employer does not accept it, and subsequently denies coverage, the employee would have a cause of action for an equal pay act violation complaint.
Here is a possible solution to your situation:
1. Offer alternative proofs of dependency. birth certificates, adoption papers, school registrations, anything that shows you have a legal obligation; and or anything that shows the child is residing with you, and that your support the child or are the child's father, etc.
2. If that does not work, then provide a copy of a filed return, with all irrelevant information blacked out. Just showing the dependent listed in the top of the return. All other information line by line blacked out, except for the IRS certification stamp, and first six lines of the 1040. (do not black out the signature lines.)
3. Callenge his policy of asking for the information by filing a law suit.
Your employer, in practice shoudl not be asking for any proof of dependency except as required by the policy of the insurance carrier. It is the insurance carrier who sets the terms of proof.