Whistleblower accuses IRS of illegally leaking tax records in retaliation

IRS investigator Brian J. Visalli has filed a lawsuit against the agency, claiming the IRS unlawfully leaked his personnel and tax records to federal prosecutors in retaliation for his whistleblowing activities.

Driving the news: Visalli is a 24-year IRS veteran specializing in complex offshore tax shelter investigations and has publicly criticized the agency for not aggressively pursuing multinational tax avoidance.

• He contributed to official reports highlighting IRS conflicts of interest and reluctance to investigate tax strategy advisers.

The big picture: The lawsuit, filed in the Northern District of Illinois, accuses supervisors of using minor tax return mistakes against Visalli to discredit and potentially remove him from his position.

• Visalli alleges the IRS escalated a minor tax oversight, which internal reviews found unintentional, as a pretext for punitive action after he filed a whistleblower retaliation complaint.
• Following his complaint, he learned Justice Department officials were labeling him as “impaired” based on legal standards that threaten the credibility of law enforcement witnesses.

What we’re watching: He is seeking damages for withheld performance rewards, medical costs tied to stress and depression, and a stress-related hospitalization due to the agency’s alleged retaliation.