IRS sued for leaking special agent’s tax info to prosecutors
- Key insight: Discover how a veteran IRS whistleblower’s confidential tax return information was allegedly leaked.
- What’s at stake: The career and credibility of a veteran federal agent who reported tax shelter failures.
- Forward look: Watch for the presentation of evidence in federal court.
Internal Revenue Service officials allegedly leaked one of their own special agent’s tax return information to Justice Department prosecutors to characterize the agent as a liar, according to a new lawsuit, after he spent a decade reporting that IRS management wouldn’t pursue the promoters of abusive tax shelters.
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The lawsuit involves agent Brian Visalli, a 24-year IRS Criminal Investigation veteran with 22 performance awards who was also the lead agent on major tax shelter investigations. His whistleblowing contributed to two audits by the Treasury Inspector General for Tax Administration, according to his attorneys. An IRS official initially found his own tax issues “not willful” and an “oversight,” but only a little over a month later, on the same record, proposed to fire him for “lack of candor,” citing a problem that no prosecutor ever actually found and that the leak itself created, according to his attorneys.
The suit, filed against the IRS and the Treasury Department, alleges that IRS officials unlawfully disclosed his confidential personnel, disciplinary and tax return information to the Department of Justice’s Tax Division.
The complaint, filed in the U.S. District Court for the Northern District of Illinois, brings claims under the Privacy Act and under the Internal Revenue Code provisions that make taxpayer return information confidential.
According to the complaint, Visalli heard in October 2024 from an Assistant U.S. Attorney that DOJ Tax Division personnel were describing him as “impaired” under Giglio v. United States and saying there was “a pending action” against him. A Giglio designation implies that a law enforcement witness has a credibility problem that needs to be disclosed to criminal defense counsel. The lawsuit alleges that no prosecutorial authority had made any such determination, no Giglio letter had been issued and no disciplinary action had even been proposed at that time.
The complaint alleges that what did exist was an investigated internal allegation arising from an employee tax compliance inquiry into Visalli’s 2021 joint tax return. It further alleges that the information could only have reached DOJ through an unauthorized disclosure by IRS officials, and that the disclosure necessarily revealed protected tax return information.
“Special Agent Visalli has spent 24 years enforcing the nation’s tax laws, including the laws that protect the privacy of every taxpayer’s information,” said his attorney, Seth Matus of Workplace Law Partners, P.C., in a statement. “This lawsuit alleges that his own agency violated those same laws against him. For a federal agent, being labeled Giglio-impaired can end a career, and the complaint alleges that label was circulated when no such determination existed.”
The complaint says Visalli has reported his concerns since 2012 to TIGTA and to leaders of the IRS Criminal Investigation leadership. Those reports concerned what he believed was a refusal by officials at the IRS’s Chicago Field Office to investigate the advisors who design and market abusive tax schemes to wealthy individuals and corporations. According to the complaint, his reports contributed to two published TIGTA audit reports. The complaint also alleges that the IRS’s own handling of the underlying tax matter was inconsistent with the Giglio characterization.
In February 2025, the agency proposed a one-day suspension under a strict-liability charge, with the proposing official stating he did not find the conduct intentional. The agency later offered to resolve the matter with a reprimand and then a counseling letter. In March 2026, an agency fact-finding memorandum concluded that his conduct was not willful. But 33 days later, the same official proposed his removal from federal service, citing potential Giglio impairment.
“The tax privacy laws do not have an exception for employees an agency finds inconvenient,” Matus stated. “We look forward to presenting the evidence in court.”
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“The abusive nature of the disclosures is further confirmed by the Agency’s current attempt to use them as a basis to justify Visalli’s removal from federal service, notwithstanding that IRS-CI proposing officials characterized the underlying conduct as a minor, strict liability violation, and notwithstanding that the same official who now proposes to remove Visalli issued a Fact Finding Memorandum less than five weeks earlier that concluded that Visalli’s actions were not willful and that he had acted proactively on later tax returns,” said the complaint.
The lawsuit seeks actual, statutory and punitive damages, along with attorney fees and costs. The complaint alleges harm including the loss of a performance award after 22 consecutive years of receiving such an award, along with medical expenses and legal costs.
Despite the retaliation he said he has endured, Visalli’s attorneys say he remains committed to continuing his service to the American taxpayers and his whistleblowing in fulfillment of the oath of office he took over twenty-four years ago.
The case is Visalli v. Internal Revenue Service, et al., Case No. 1:26-cv-12139, U.S. District Court for the Northern District of Illinois, Eastern Division. The allegations in the complaint haven’t been proven in court.
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