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At the end of the day it comes down to this... they have something that you want. If you want it bad enough, you will bend over to meet their requirements. If you don't want it bad enough, you will move on and find someone that wants your business more.
I set up a new company a couple months ago and I used a new bank to do so. Before the new bank would give me a credit line, they wanted to make sure that my financial situation with my other company was in good standing so they requested tax records. As I can see their concern, I had no problem showing them that I am not an idiot. I wanted something from them, showing them my tax records really does not negatively impact me in any way...
Now if a sponsor requested my tax records... I would laugh and move on to the next one.
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