The thing is, this sort of thing does get abused. Agencies will scrape whatever information they can get and use it against you if it serves their purposes.
A few years back, my house was condemned on me while I was inside it watching tv. Apparently some branch of the city gov't forgot to file some random form with the county gov't which caused my property tax information to not be uploaded to some city database. Therefore since the house I bought was a foreclosure, they had in their records an unoccupied house that went uninspected for a lapse of 6 months, violating requirements. So an inspecor came over and rather that wondering why an "unoccupied" house had lights on and cars parked in the driveway, he just went up to the door and posted the condemnation signs up. I noticed them as he was driving away.

Needless to say, I had to provide a ton of very private information to them in order to get my house uncondemned. Tax information, pay stubs, electric bills, birth certificates, you name it. Balls to the wall, i grumbled and just did what they asked. Big mistake.
A few months later, some other city department was inspecting our bill and determined that we had too high of an electric bill, this prompted a city investigator to go to our property and check to see if I was running a commercial business (or weed, I guess) out of my home. At least this is what the city inspector told me when I called her up after getting a nasty letter from her saying I was to be under inspection for property tax evasion. The inspector found an old sign lying out on my garage that said "tenant parking only" The house I bought was a rental before it was foreclosed, and when I bought it, I just never threw the sign out because people would try to park in my driveway.
Well, we tried to fight that one, and thankfully we avoided depositing another lump of private information on the city's lap, but they still demanded an inspection to prove I was not renting out my property without paying rental taxes on it. I tried to fight that as well, but then it got to the point where the city threatened to report that we were harboring illegal immigrants. The city jumped to the conclusion that the only reason why I didn't want an inspector in my house was because I was hiding illegals in my attic.

Well, since my wife was working on getting her citizenship at the time, my balls were now in a blender, so I just agreed to the inspection.
The inspection was pretty much as I thought it would end up, the inspector said that I had too many power tools, so clearly I was building without a permit, and I had an old mailbox sitting inside my locked porch, so that must be the second mailbox for the illegal family in my attic. Oh, and she didn't believe me when I told her that my guest bedroom was a guest bedroom. I just got pissed and laid it out flat the whole stupid story for her of everything that happened since day 1. Well, I guess she sort of got the point of how idiotic the whole thing was and finally backed off. Of course she threw out a number of smarmy comments about how I may have won this time, but they will be watching me.
Well, long story short, don't give any form of gov't even an inch when it comes to your private information. When they need to, they
will take a mile.