Internal Revenue Service

The Internal Revenue Service Building, located in the center of the Federal Triangle complex in Washington, D.C LCCN2013634106

IRS Sign

George S. Boutwell, the first Commissioner of Internal Revenue Service

1920 tax forms IRS

Department of Treasury retirement reception of Beth Tucker 01

20220826 Share of unpaid taxes, by income level - area chart, treemap - NYTimes - Dept of Treasury

Internal Revenue Service (IRS)

The Internal Revenue Service (IRS) is a United States federal government agency responsible for the collection of taxes and the enforcement of tax laws. Established in 1862 by President Abraham Lincoln, the agency operates under the authority of the United States Department of the Treasury. Its primary function is to administer the Internal Revenue Code, the statutory basis of federal tax law in the United States.

History

The origins of the IRS trace back to the Civil War when President Lincoln and Congress created the Commissioner of Internal Revenue and enacted an income tax to pay war expenses. The income tax was repealed ten years later, but the 16th Amendment, ratified in 1913, permanently established the income tax as a cornerstone of the U.S. tax system. Since then, the IRS has grown significantly in size and complexity, reflecting the expansions of the tax code and the increasing role of taxation in federal policy.

Functions and Responsibilities

The IRS has a broad range of responsibilities, including but not limited to:

• Collecting federal income taxes, employment taxes, and various other types of federal taxes.
• Processing tax returns, including individual and corporate tax returns.
• Issuing tax refunds to taxpayers who have overpaid their taxes.
• Enforcing tax laws and pursuing tax evasion and fraud.
• Assisting taxpayers with tax law compliance and tax return preparation through various outreach and education programs.

Organization

The IRS is headed by the Commissioner of Internal Revenue, who is appointed by the President of the United States with the advice and consent of the Senate. The agency is organized into several divisions, each responsible for specific types of taxpayers or areas of tax law, such as the Wage and Investment Division, the Large Business and International Division, and the Tax Exempt and Government Entities Division.

Technological Advances

Over the years, the IRS has made significant strides in utilizing technology to improve tax administration. This includes the introduction of electronic filing (e-filing) systems, which allow taxpayers to submit their tax returns online, and the development of advanced data analytics to enhance compliance efforts and combat fraud.

Controversies and Challenges

The IRS has faced various controversies and challenges throughout its history, including allegations of political bias, issues with taxpayer privacy, and challenges in customer service. The agency's role in implementing parts of the Affordable Care Act, particularly the individual mandate, has also been a source of significant debate and legal scrutiny.

Future Directions

Looking forward, the IRS is likely to continue evolving in response to changes in tax law, technology, and taxpayer needs. Efforts to modernize its technology infrastructure, improve taxpayer services, and enhance enforcement capabilities are expected to be ongoing priorities.

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