Whistleblowers reach settlement with IRS, DOJ over Hunter Biden case

A pair of whistleblowers who worked for the Internal Revenue Service's Criminal Investigation unit have reached a settlement with the IRS and the Department of Justice over claims they faced retaliation for complaining about the IRS and DOJ's treatment of Hunter Biden's tax charges.

Gary Shapley and Joseph Ziegler, who were both special agents with the CI division, testified in 2023 before the House Oversight Committee that then-President Joe Biden's son Hunter received preferential treatment during a tax-evasion investigation, and said that they had been removed from the investigation after complaining to their supervisors in 2022. 

Hunter Biden agreed to a plea deal in 2023 on both tax and firearms charges with prosecutors, but the plea deal fell apart when it was questioned by a judge and special counsel David Weiss, who had initially agreed to the deal. Hunter Biden was later convicted in 2024 on the firearms charges, which related to lying about his drug use on an application for a handgun, and he again pleaded guilty to not paying at least $1.4 million in taxes. He was pardoned by his father shortly before the elder Biden left office in January. 

In March, both Shapley and Ziegler were promoted to special advisors to Treasury Secretary Scott Bessent. Shapley briefly became acting IRS commissioner in April, but was removed only a few days later during a power struggle between Bessent and Elon Musk, who was then the head of the U.S. DOGE Service. Shapley is reportedly now being considered to take over the IRS Criminal Investigation unit, according to The Wall Street Journal, which also reported that the administration was looking to install "allies" in the unit who would pursue investigations of Democrats and left-leaning political groups.

The settlements with the IRS and the DOJ, which were announced by the whistleblower law firm Empower Oversight on Thursday, included significant compensation for damages and a requirement for new training for federal prosecutors to deter future whistleblower retaliation. Shapley and Ziegler had filed an 84-page complaint with the Merit Systems Protection Board alleging retaliation by the two agencies.

Shapley and Ziegler filed a defamation lawsuit last October against Hunter Biden's lawyer, Abbe Lowell. The lawsuit was dismissed Thursday in an opinion by Judge Richard Leon, a senior judge with the U.S. District Court for the District of Columbia.

Shapley and Ziegler issued a joint statement on the developments: "We have been in the public eye because we did our duties as loyal public servants. We legally blew the whistle when Hunter Biden almost escaped prosecution for his crimes because he was the president's son.  We had to file a lawsuit against Biden's attorney, Abbe Lowell, because he falsely accused us of committing serious felonies in retaliation. Since then, Biden pled guilty to his crimes and has been pardoned. He also dropped his lawsuit against the IRS targeting us for our protected disclosures. We have recently concluded settlement agreements of our claims that the DOJ and IRS illegally retaliated against us for blowing the whistle on the improper politicization of that case. In addition to substantial compensation for the harm we suffered, the DOJ has agreed to use this example to train all federal prosecutors for years to come, so other brave civil servants are not victimized the way we were."

"Today, a federal judge announced that when Abbe Lowell published that we had committed a 'clear-cut crime unprotected by any whistleblower statute' and other similar allegations, he was merely speaking his opinion," the statement continued. "Although the judge dismissed our defamation case, we disagree that Lowell's attack was just his opinion and will consider whether to appeal. We think the record speaks for itself about what we did, who Biden is, and the value of Lowell's so-called opinion."