Hunter Biden sues the IRS, alleging agents illegally released his tax information

CNN

By Kara Scannell, CNN

(CNN) — Hunter Biden sued the Internal Revenue Service on Monday, alleging its agents illegally released his tax information and that the agency failed to protect his private records.

President Joe Biden’s son alleges the IRS unlawfully disclosed his tax return information and did not establish safeguards to ensure the confidentiality of his records. He is seeking, among other things, all documents involving the disclosure of the tax information, $1,000 for each unauthorized disclosure and attorneys fees.

The lawsuit, which was filed in federal court in Washington, DC, does not name the two IRS agents turned whistleblowers as defendants. But the lawsuit is centered on disclosures made by the agents, Gary Shapley and Joseph Ziegler, and their lawyers in public statements, congressional testimony and interviews.

Judge Timothy Kelly, a Donald Trump appointee, has been assigned to the case.

It’s being filed amid a swirl of other legal issues facing Hunter Biden, who was indicted by special counsel David Weiss on three felony gun charges last week and is potentially facing additional tax charges by Weiss.

“Despite clear warnings from Congress that they were prohibited from disclosing the contents of their testimony to the public in another forum, Mr. Shapley and Mr. Ziegler’s testimony only emboldened their media campaign against Mr. Biden,” the lawsuit states. “And finally, since their public testimony before the House of Representatives on July 19, 2023, the agents have become regular guests on national media outlets and have made new allegations and public statements regarding Mr. Biden’s confidential tax return information that were not previously included in their transcripts before the Committee on Ways and Means.”

Specifically, Hunter Biden’s attorneys point to details Shapley shared in an interview with CBS News that aired in late June. During the interview, Shapley alleged that Biden took certain personal expenses as business expenses, including “prostitutes, sex club memberships, hotel rooms for purported drug dealers,” and that Biden owed $2.2 million in unpaid taxes, the lawsuit alleges.

Shapley’s attorneys called the lawsuit a “frivolous smear” and said the agents only discussed information allowed under the statute. Ziegler’s attorney said the lawsuit is an effort to “distract from the ever-growing evidence that supports the testimony of the two IRS whistleblowers.”

The IRS said it does not comment on pending litigation.

“The lawsuit is about the decision by IRS employees, their representatives, and others to disregard their obligations and repeatedly and intentionally publicly disclose and disseminate Mr. Biden’s protected tax return information outside the exceptions for making disclosures in the law,” the lawsuit alleges.

The suit adds: “These agents’ putative ‘whistleblower’ status cannot and does not shield them from their wrongful conduct in making unauthorized public disclosures that are not permitted by the whistleblower process. In fact, a ‘whistleblower’ is supposed to uncover government misconduct, not the details of that employee’s opinion about the alleged wrongdoing of a private person.”

The lawsuit alleges Shapley and Ziegler went beyond confirming the investigation into Hunter Biden’s taxes and provided specific allegations, the amount of deductions taken and liabilities owed for tax years.

Tensions have been rising in the investigation. On Friday, Shapley’s lawyers issued a statement saying Hunter Biden’s attorneys have tried to get the Justice Department to retaliate against their clients for making disclosures protected under whistleblower rules.

“Taxpayer privacy laws are written by Congress, and it gave itself authority in those laws to hear disclosures about taxpayer information,” Shapley’s attorney said in a statement on Friday.

The IRS agents went public with their allegations concerning the Justice Department’s handling of investigation into Hunter Biden earlier this year.

In June, the Justice Department announced it had reached a deal with Hunter Biden in which he would plead guilty to two tax misdemeanors for failing to pay his taxes on time in 2017 and 2018. He had also reached a deal to avoid prosecution on a gun possession charge, but the deal fell apart after a federal judge prodded its structure.

After the judge would not sign off on the deal, talks broke down between Weiss’ office and Hunter Biden’s attorneys. Weiss asked for special counsel status.

This story has been updated with additional details.

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