Several reasons. An address in a different state jurisdiction could be used to try to avoid state income taxes. Example: a taxpayer who lives in California may owe 9% or more of their income in state income taxes. If the taxpayer claims to reside in Washington state, he/she would owe no state income taxes, because Washington has no personal income tax. Obviously, this is tax fraud, but that would be a reason, despite its illegality.
Another reason could be a desire to prevent the IRS or California Franchise Tax Board (FTB) from ascertaining the taxpayer's actual residence. Perhaps the taxpayer owes unpaid taxes, and doesn't want the government to discover that the taxpayer is residing in a very high value property, because there is no obvious ownership connection to the taxpayer.
Another reason is that some cities impose local business license taxes, so if the taxpayer has side businesses that would be taxed locally, then by using a different address, the FTB, which reports taxpayer business addresses to municipalities for verification of business tax liability, the taxpayer would avoid those business taxes. This too, is tax fraud, but again, this could be a reason, despite its illegality.
Another reason would simply be so that no other employee knows where the taxpayer lives. This would be useful to avoid having a disgruntled employee show up at the taxpayer's residence for the purposes of seeking to commit some violent act against the taxpayer. This actually may be the most relevant rationale -- especially if the taxpayer is responsible for making employment decisions affecting other employees.
If I thought about it, I probably could come up with other reasons, but the above represents the things that immediately come to mind.
Hope this helps.
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Hope this helps.