An IRS investigator sued the agency this month, claiming officials illegally leaked his confidential personnel records to federal prosecutors to punish him for years of whistleblowing on the agency’s failure to tackle tax dodging.

Brian J. Visalli, a 24-year IRS veteran, specializes in investigating complex offshore tax shelters. He has publicly criticized the agency, writing articles about its unwillingness to aggressively target schemes that multinational companies use to skirt their taxes. He contributed to two reports published by the Treasury Inspector General for Tax Administration: one on conflicts of interest within the IRS and the other on the agency’s refusal to investigate advisers who design and sell aggressive tax strategies.

He says the IRS is using relatively small mistakes in his personal tax return to retaliate against him. The suit claims the IRS illegally disclosed his employee and tax information to Justice Department prosecutors to discredit and fire him. The lawsuit was filed in U.S. District Court in the Northern District of Illinois. The IRS did not respond to a request for comment.

Visalli’s investigations included a probe into Malta pension plans, a tax-dodging strategy used by wealthy Americans. To fight the crackdown, promoters of the scheme hired lobbyist Ken Kies, who last year became the top tax official in the Treasury Department under President Donald Trump.

In the past year, Visalli has written articles in Tax Notes, a trade publication, criticizing the IRS’ record on pursuing multinational tax dodgers. He attacked his employer for failing to use a 2010 law requiring transactions that generate tax benefits to have “economic substance.” He said the agency suffered from “institutional cowardice.”

The refusal to invoke that law “represents a fundamental abdication of the IRS’ responsibility to protect the fiscal foundation of American government from sophisticated tax fraud masquerading as legitimate business planning,” he wrote.

The agency has turned tax enforcement “into a negotiation in which the government starts from a position of weakness and retreats from there.”

Jeffery Kadet, one of Visalli’s co-authors and an adjunct professor on tax law at the University of Washington, called him “exemplary in his focus on understanding” complicated corporate tax strategies. “He has an energy and a commitment to the rule of law that is exactly what we, as a society, need,” Kadet said.

Visalli’s criticism of the IRS and the “abusive tax industry” have drawn attacks from right-wing groups. Chuck Flint, president of the Alliance for IRS Accountability, a group that opposes the agency, with headquarters at a Houston mailbox, told The Washington Examiner in May: “This guy is just the latest in a long line of people at the IRS that seem to take matters into their own hands.”

The lawsuit claims that the IRS sent Visalli a letter in August 2023 stating that he failed to fully pay his tax liability on time for 2021. The agency found the failure was an “oversight” and “not willful” and proposed a one-day suspension, then reduced it to a counseling letter, which managers often use to document minor misconduct. But he claims his supervisors escalated the episode as an excuse to push him out of his job. In late summer 2024, Visalli filed a whistleblower retaliation complaint with the U.S. Office of Special Counsel, an independent federal agency that protects employees from reprisal for whistleblowing.

Visalli said that an assistant U.S. attorney told him a few weeks later that Justice Department Tax Division personnel were describing him as “impaired” based on a Supreme Court case, Giglio v. the United States, which requires prosecutors to disclose to defense lawyers any past evidence of dishonesty by a law enforcement official involved in a case.

“For a federal criminal investigator, a Giglio label is a scarlet letter,” according to the lawsuit. The characterization “that Visalli was a witness whose credibility was so compromised that it had to be disclosed to criminal defendants, could only have originated with unauthorized disclosures by IRS officials concerning an investigation into a financial disclosure previously made by Visalli.”

In March, Visalli met with a special agent for the Treasury Inspector General for Tax Administration to report his supervisors’ actions.

Despite internal findings in March that his tax failures were an oversight, the agency moved a month later to remove him from his job. He is still employed by the IRS.

Visalli is seeking damages for a withheld annual performance reward along with medical costs — including antidepression medication and expenses from a stress-induced fall and hospitalization — following the news of his pending removal.

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This article originally appeared in The New York Times.

By Jesse Drucker/Jason Andrew
c. 2026 The New York Times Company