Deputy Solicitor-General Matthew Palmer is returning to legal practice.

A former IRD solicitor is suing deputy Solicitor-General Matthew Palmer, and the Crown Law Office for alleged defamation.

Lysette du Claire claims that letters and emails sent by Dr Palmer to the IRD "destroyed her reputation and her career."

Ms du Claire, who is seeking substantial damages, also alleges malfeasance in public office.

She alleges that her health suffered as a result of the stress and that the ultimate consequence of Dr Palmer's actions was that she was dismissed by the IRD in November last year.