Internal Revenue Service IRS
Agency overview
Formed	July 9, 1953
Preceding Agency	Bureau of Internal Revenue
Jurisdiction	Federal government of the United States
Headquarters	Washington, D.C.
Employees	86,585 (2006)
Agency Executive	Commissioner of Internal Revenue, Douglas H. Events 455 - Roman military commander Avitus is proclaimed Emperor of the Western Roman Empire. Year 1953 ( MCMLIII) was a Common year starting on Thursday (link will display full calendar of the Gregorian calendar. The federal government of the United States is the central United States Governmental body established by the United States Constitution. Washington DC ( formally the District of Columbia and commonly referred to as Washington, the District, or simply D The Commissioner of Internal Revenue (or IRS Commissioner) is the head of the Internal Revenue Service (IRS a bureau within the United States Department of Shulman
Parent agency	Department of the Treasury
Website
www.irs.gov

Taxation in the United States
This article is part of a series on Taxation
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Income tax · Payroll tax Alternative Minimum Tax Estate tax · Excise tax Gift tax · Corporate tax Capital gains tax
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Federal tax reform Competitive Tax Plan Efficient Taxation of Income Real Property Use Tax Taxpayer Choice Act USA Tax · Value Added Tax FairTax · Flat tax
Tax protesting History America: Freedom to Fascism The Law that Never Was Cheek v. United States Notable tax protesters Irwin Schiff Richard Michael Simkanin Robert Clarkson · Tom Cryer Vivien Kellems Wayne C. Bentson Wesley Snipes
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The Internal Revenue Service (IRS) is the United States federal government agency that collects taxes and enforces the internal revenue laws. The United States Department of the Treasury is a Cabinet department and the Treasury of the United States government. Taxation in the United States is a complex system which may involve payment to at least four different levels of government and many methods of taxation Taxation in the United States is a complex system which may involve payment to at least four different levels of government and many methods of taxation Article I, Section 8, Clause 1 of the United States Constitution, is known as the Taxing and Spending Clause. The history of taxation in the United States began when it was composed of colonies ruled by the British Empire, French Empire, and Spanish Empire The United States Tax Court is a federal Trial court of record established by Congress under Article I of the U Tax forms in the United States are used by taxpayers and tax-exempt organizations to report financial information to the Internal Revenue Service (IRS The Internal Revenue Code (or IRC; more formally the Internal Revenue Code of 1986 as amended) is the main body of domestic statutory Tax law This is a table of the total Federal tax revenue by state collected by the U The The Federal Insurance Contributions Act (FICA tax ( is a United States payroll (or employment Tax imposed by the federal government on both employees Alternative Minimum Tax ( AMT) is part of the Federal Income tax system of the United States. The estate tax in the United States is a Tax imposed on the transfer of the "taxable estate " of a deceased person whether such property is transferred Excise tax, sometimes called an excise duty, is a type of Tax. A gift tax is a Tax imposed on the gratuitous transfer of ownership of property Corporate tax in the United States is imposed both by the federal government and by most state governments In the United States individuals and corporations pay Income tax on the net total of all their capital gains just as they do on other sorts of income Taxation in the United States is a complex system which may involve payment to at least four different levels of government and many methods of taxation State income tax is an Income tax in the United States that is levied by each individual state. State tax levels indicate both the tax burden and the services a state can afford to provide residents Sales taxes in the United States are a Tax added onto the price of goods or services that are purchased in the United States. A use tax is a type of Excise tax levied in the United States. Property tax, or millage tax, is an Ad valorem tax that an owner pays on the value of the property being taxed Tax reform is the process of changing the way Taxes are collected or managed by the Government. The Competitive Tax Plan is an approach to Taxation, suggested in the United States, that would impose a 10&ndash15% Value added tax (VAT and reduce personal The Efficient Taxation of Income is an approach to Taxation that would apply different Tax rates for property-type income and earned income from work The Real Property Use Tax (RPUT is a tax system with assessment based on the size level of development and time-in-use of real property and designed for general revenue acquisition The Taxpayer Choice Act (/ is a bill in the United States Congress which if enacted would amend the Internal Revenue Code to eliminate the The USA Tax Act ( short for "Unlimited Savings Allowance" was a bill in the United States Congress for changing tax laws to replace the Value added tax ( VAT) or goods and services tax ( GST) is a consumption Tax levied on value added. The FairTax is a proposed change to the federal tax laws of the United States that would replace all federal income taxes with a single national retail A flat tax (short for flat rate tax is a Tax system with a constant tax rate The A America Freedom to Fascism (also America From Freedom to Fascism or (per the title card America Freedom to Fascism Volume One The Law That Never Was The Fraud of the 16th Amendment and Personal Income Tax is a 1985 book by William J Cheek v United States, 498 US 192 ( 1991) was a case in which the United States Supreme Court held that a tax protester's belief Richard Michael Simkanin is a tax protester serving a prison sentence after having been convicted on twenty-nine counts of United States federal tax crimes Robert Barnwell Clarkson is a tax protester in South Carolina. Vivien Kellems, (born in Des Moines, Iowa, June 7 1896 died 1975 was a Connecticut industrialist who fought the U Wayne C Bentson is a businessman and tax protester from Payson Arizona. Wesley Trent Snipes (born July 31, 1962) is an American Actor, Film producer, and Martial artist. Personal income taxes See also Income tax in Australia Only the federal government imposes income taxes on individuals and this is the most significant source of Taxation in the British Virgin Islands is relatively simple by comparative standards photocopies of all of the tax laws of the British Virgin Islands would together amount to about 200 The level of Taxation in Canada is average among Organisation for Economic Co-operation and Development (OECD countries Taxes provide the most important revenue source for the Government of the People's Republic of China. See Government of Colombia for a wider perspective of Colombian government See Government of France for a wider perspective of French government Taxes in Germany —being a Federal Republic —are levied by the federation ( Bund) the States ( Länder) as well as the HK Inland Revenue Ordinance Cap112 is one of Hong Kong's Ordinances Taxes in India are levied by the Central Government and the State Governments This article ls with Taxation in Indonesia or pajak. Definitions "Pajak" in Indonesian for Tax and taxes whereas " Perpajakan The system of Taxation in Ireland is broadly similar to the system of Taxation in the United Kingdom. The Netherlands has a rich history dealing with taxation predating the Romanic period. Taxation in New Zealand is collected at a national level by the Inland Revenue Department (IRD on behalf of the Government of New Zealand. The Income tax in Peru is collected by the Superintendencia Nacional de Administración Tributaria, best known as SUNAT. The Russian Tax Code is the primary tax law for the Russian Federation. Individual income tax in Singapore forms part of two main sources of Income tax, the other being Corporate taxes on companies In Tanzania the Income Tax Act 2004 came into effect in July 2004 Taxation in the United Kingdom may involve payments to a minimum of two different levels of government The central government ( Her Majesty's Revenue and Customs) Taxation in the United States is a complex system which may involve payment to at least four different levels of government and many methods of taxation Value added tax ( VAT) or goods and services tax ( GST) is a consumption Tax levied on value added. Comparison of Tax Rates around the world is a difficult and somewhat subjective enterprise This table lists countries by total 2005 Tax revenues (federal state and local as a percentage of GDP (Gross Domestic Product The federal government of the United States is the central United States Governmental body established by the United States Constitution. "Tax code" redirects here For the term as used in the United Kingdom PAYE system see Tax code (PAYE. The official U.S. Treasury regulations provide (in part):

The Internal Revenue Service is a bureau of the Department of the Treasury under the immediate direction of the Commissioner of Internal Revenue. The United States of America —commonly referred to as the The United States Department of the Treasury is a Cabinet department and the Treasury of the United States government. The Commissioner of Internal Revenue (or IRS Commissioner) is the head of the Internal Revenue Service (IRS a bureau within the United States Department of The Commissioner has general superintendence of the assessment and collection of all taxes imposed by any law providing internal revenue. The Internal Revenue Service is the agency by which these functions are performed.

– 26 C. F. R. section 601. 101(a).

History

Bureau of Internal Revenue

In July of 1862, during the Civil War, President Lincoln and Congress created the office of Commissioner of Internal Revenue and enacted an income tax to pay war expenses (see Revenue Act of 1862). Causes of the war See also Origins of the American Civil War, Timeline of events leading to the American Civil War The coexistence of a slave-owning South The President of the United States is the Head of state and Head of government of the United States and is the highest political official in United States by Abraham Lincoln (February 12 1809 &ndash April 15 1865 the sixteenth President of the United States, successfully led his country through its greatest internal The United States Congress is the bicameral Legislature of the federal government of the United States of America, consisting of two houses The Commissioner of Internal Revenue (or IRS Commissioner) is the head of the Internal Revenue Service (IRS a bureau within the United States Department of The Revenue Act of 1862 ( July 1, 1862, Ch 119) was passed by the United States Congress during the American Civil War and signed into law The position of Commissioner exists today as the head of the Internal Revenue Service.

This organization was created to enforce these taxes named for the internal revenue to be collected (and was formerly called the "Bureau of Internal Revenue"), in contrast to U. S. government institutions that collected external revenue through duties and tariffs. See also Taxation, Indirect Tax In Economics, a duty is a kind of Tax, often associated with Customs, a payment due to the For other uses of this word see Tariff (disambiguation. A tariff is a tax imposed on goods when they are moved across a political boundary

The IRS has its National Capital offices in the greater Washington, D.C. area, and in particular does most of its computer programming in Maryland. Washington DC ( formally the District of Columbia and commonly referred to as Washington, the District, or simply D It operates various service centers around the country (currently ten; these are the locations to which taxpayers mail their returns); these centers do the actual tax processing; different types of tax processing take place in various centers (such as the distinction between individual and business tax processing). The IRS also operates three computer centers in various locations around the country. A computer is a Machine that manipulates data according to a list of instructions.

Name change and reorganization

As early as the year 1918, the Bureau of Internal Revenue began using the name "Internal Revenue Service" on at least one tax form. ^[1] In 1953 the name change to the "Internal Revenue Service" was formalized in Treasury Decision 6038. ^[2]

In the 1950s, career professional employees replaced the patronage system. Employment is a Contract between two parties, one being the employer and the other being the employee. Patronage is the support encouragement privilege and often financial aid given by a person or an organization Currently, only the IRS Commissioner and Chief Counsel are selected by the President and confirmed by the Senate.

Reorganization of the late 1990s

A bipartisan commission was created with several mandates, among them to increase customer service and improve collections. ^[3] Congress later enacted the Internal Revenue Service Restructuring and Reform Act of 1998. The Internal Revenue Service Restructuring and Reform Act of 1998, also known as Taxpayer Bill of Rights III, (, enacted 1998-07-22) resulted from hearings held ^[4] As a result of that Act the IRS now functions under four major operating divisions: Large & Mid-Size Business (LMSB), Small Business / Self-Employed (SB/SE), Wage and Investment (W&I), and Tax Exempt & Government Entities (TE/GE). The IRS also includes a criminal law enforcement division. While there is some evidence that customer service has improved, lost tax revenues in 2001 were over $290 billion. ^[5]

Flooding at IRS headquarters building

IRS building on Constitution Avenue in Washington, D.C.. In Washington DC, Constitution Avenue is a major east-west street running just north of the United States Capitol in the city's Northwest and Northeast Washington DC ( formally the District of Columbia and commonly referred to as Washington, the District, or simply D

The main headquarters building of the IRS is located at 1111 Constitution Avenue, NW in Washington, D.C., near the Old Post Office. Washington DC ( formally the District of Columbia and commonly referred to as Washington, the District, or simply D The Old Post Office Pavilion is located at the intersection of 12th Street and Pennsylvania Avenue, NW, in Washington DC. The IRS headquarters building was closed in June 2006 as a result of heavy flooding. According to a July 12, 2006 letter from Senator Max Baucus (Dem. Max Sieben Baucus (born December 11, 1941) is the senior United States Senator from Montana and is a member of the Democratic Party -Montana), a ranking member of the U. S. Senate Finance Committee, the sub-basement of the building was filled with water to a depth of twenty feet, and electrical and maintenance equipment in the sub-basement was about 95% damaged or destroyed. The US Senate Committee on Finance (or less formally Senate Finance Committee) is a Standing committee of the United States Senate. The IRS and the General Services Administration announced that the building would remain closed through late 2006. The General Services Administration ( GSA) is an Independent agency of the United States government, established in 1949 to help manage and support the basic functioning The employees who worked in the building — numbering over two thousand — had been temporarily transferred to other offices at 15 other buildings in the Washington, D. C. area. Computerworld reported that some IRS employees were also allowed to telecommute while the building was closed. Computerworld is an IT magazine that provides information to technology managers Telecommuting, e-commuting, e-work, telework, working at home (WAH, or working from home (WFH is a work arrangement in ^[6]

On December 8th, 2006, the IRS said in a press release that "the phased move-in of more than 2,000 IRS employees" had begun. ^[7] Most staff would have returned by December 19th but "a small number of employees will return after Jan. 1. "

Commissioner

Douglas H. Shulman is the Commissioner of Internal Revenue. Douglas H Shulman is the Commissioner of Internal Revenue. His nomination was confirmed by the full U The Commissioner of Internal Revenue (or IRS Commissioner) is the head of the Internal Revenue Service (IRS a bureau within the United States Department of

Tax collection statistics

Summary of Collections before Refunds by Type of Return, Fiscal Year 2006:

During Fiscal Year (FY) 2006, the IRS collected more than $2. The United States dollar ( sign: $; code: USD) is the unit of Currency of the United States; it has also been The Corporate tax in the United States is imposed both by the federal government and by most state governments The Federal Insurance Contributions Act (FICA tax ( is a United States payroll (or employment Tax imposed by the federal government on both employees A gift tax is a Tax imposed on the gratuitous transfer of ownership of property Excise tax, sometimes called an excise duty, is a type of Tax. The estate tax in the United States is a Tax imposed on the transfer of the "taxable estate " of a deceased person whether such property is transferred 2 trillion in tax net of refunds, about 44 percent of which was attributable to the individual income tax. This is partially due to the nature of the individual income tax category; containing taxes collected from working class, small business, self employed, and capital gains. Of the Individual Income Tax, the top 5% of income earners pay 60% of this amount. ^{[8] [9]}

Recently, the IRS has altered its policies. The current Service plus Enforcement equals Compliance motto has led to more investigations of abusive tax schemes.

As of 2007, the agency estimates it is owed $300 billion more than it collects. ^[10]

Outsourcing collections

In September 2006, the IRS started to outsource the collection of taxpayers debts to private debt collection agencies. Opponents to this change note that the IRS will be handing over personal information to these debt collection agencies, who are being paid between twenty-two and twenty-four percent of the amount collected. Opponents are also worried about the agencies' being paid on percent collected because it will encourage the collectors to use pressure tactics to collect the maximum amount. IRS spokesman Terry Lemons responds to these critics saying the new system "is a sound, balanced program that respects taxpayers' rights and taxpayer privacy. " Other state and local agencies also use private collection agencies. ^[11]

Administrative functions

In addition to collection of revenue and pursuing tax cheaters, the IRS issues administrative rulings such as revenue rulings and private letter rulings. Revenue Rulings are public administrative rulings by the Internal Revenue Service (IRS that apply the law to particular factual situations Private letter rulings are written decisions by the Internal Revenue Service in response to taxpayer requests for guidance In addition the Service publishes the Internal Revenue Bulletin containing the various IRS pronouncements. The controlling authority of regulations and revenue rulings allows taxpayers to rely on them. A private letter ruling is good for the taxpayer to whom it is issued, and gives some explanation of the Service's position on a particular tax issue. As is the case with all administrative pronouncements, taxpayers sometimes litigate the validity of the pronouncements, and courts sometimes determine a particular rule to be invalid where the agency has exceeded its grant of authority. The IRS also issues formal pronouncements called Revenue Procedures that among other things tell taxpayers how to correct prior tax errors. Revenue procedures are published statements of the Internal Revenue Service practices and procedures

More formal rulemaking to give the Service's interpretation of a statute or when the statute itself directs that the Secretary of the Treasury shall provide, IRS undergoes the formal regulation process with a Notice of proposed rulemaking (NPRM) published in the Federal Register announcing the proposed regulation, the date of the in person hearing and the process for interested parties to have their views heard either in person at the hearing in Washington, D. The United States Secretary of the Treasury is the head of the United States Department of the Treasury, concerned with finance and monetary matters, and until A notice of proposed rulemaking or NPRM is issued by law when a regulatory agency of the United States Federal Government wishes to add remove The Federal Register (since March 14, 1936) abbreviated Fed Reg C. , or by mail. Following the statutory period provided in the Administrative Procedure Act (an abiding interest of U.S. Supreme Court Justice Antonin Scalia's dissenting opinions) the Service decides on the final regulations "as is," or as reflecting changes, or sometimes withdraws the proposed regulations. The federal Administrative Procedure Act (APA of 1946 governs the way in which administrative agencies of the United States federal government may propose The Supreme Court of the United States is the highest judicial body in the United States and leads the federal judiciary. (born March 11, 1936) is an American Jurist and the second most senior Associate Justice of the Supreme Court of the United States Generally, taxpayers may rely on proposed regulations until final regulations become effective. For example, human resource professionals are relying on the October 4, 2005 Proposed Regulations (citation 70 F.R. 57930-57984)^[12] for the Section 409A on deferred compensation (the so-called Enron rules on deferred compensation to add teeth to the old rules) because regulations have not been finalized. The Federal Register (since March 14, 1936) abbreviated Fed Reg Enron Creditors Recovery Corporation (formerly Enron Corporation, former NYSE ticker symbol ENE was an American Energy company based in

Criticism

Allegations of abuse

The IRS, and in particular the Criminal Investigation Division (CID), has on more than one occasion been accused of abusive behavior. ^{[13][14][15][16]} Statements given in hearings before the Senate Finance Committee criticize the IRS:

Congress passed the Taxpayer Bill of Rights III on July 22, 1998, which shifted the burden of proof from the taxpayer to the IRS in certain limited situations. The Internal Revenue Service Restructuring and Reform Act of 1998, also known as Taxpayer Bill of Rights III, (, enacted 1998-07-22) resulted from hearings held Events 1099 - First Crusade: Godfrey of Bouillon is elected the first Defender of the Holy Sepulchre of The Kingdom of Year 1998 ( MCMXCVIII) was a Common year starting on Thursday (link will display full 1998 Gregorian calendar) The IRS retains the legal authority to enforce liens and seize assets without obtaining judgment in court. ^[17]

IRS building on Constitution Avenue in Washington, D.C.. In Washington DC, Constitution Avenue is a major east-west street running just north of the United States Capitol in the city's Northwest and Northeast Washington DC ( formally the District of Columbia and commonly referred to as Washington, the District, or simply D

Allegations of insidious conduct by the IRS are found in the movie America: From Freedom to Fascism (Watch Movie), directed by Libertarian filmmaker Aaron Russo. America Freedom to Fascism (also America From Freedom to Fascism or (per the title card America Freedom to Fascism Volume One Libertarianism is a term used by a broad spectrum of political philosophies which prioritize individual Liberty and seek to minimize or even abolish the Aaron Russo (February 14 1943 &ndash August 24 2007 was an American entertainment businessman film maker, and political activist The movie alleges that the IRS is part of a plot to make the United States a police state. The term police state describes a State in which the government exercises rigid and repressive controls over the social economic and political See also Tax protester conspiracy arguments and Milton William Cooper. Milton William Cooper ( May 6, 1943 - November 5, 2001) was an American Writer, Shortwave broadcaster

Attorney Michael Minns has asserted that the IRS often destroys the lives of those it targets with no regard for their personal lives or reputations, or that of their families. Minns was the defense lawyer in a case against the IRS on behalf of James and Pamela Moran after an initial indictment and what Minns asserts was an IRS smear campaign that virtually canvassed the taxpayers' own hometown and surrounding area. ^[18] The original indictment was associated with the Morans' involvement with a tax shelter provider, Anderson's Ark & Associates. The Morans were eventually acquitted in the case. ^[19]

Attorney Michael Minns asserted that the behavior of two IRS attorneys, Kenneth McWade and William A. Sims, constituted legal misconduct. Following an investigation, the law licenses of the IRS attorneys were suspended for a two year period after a federal court ruling that the two had defrauded the courts in connection with 1,300 tax shelter cases. In 2003, the United States Court of Appeals for the Ninth Circuit concluded that the IRS lawyers had corruptly agreed with certain taxpayers that no tax collection actions would be taken against them - in return for testimony against other taxpayers. The court also asked why the IRS had not punished the two. ^[20]

Legal status and authority

For more details on this topic, see Tax protester statutory arguments.

Many tax protesters claim that because the IRS itself was not created by statute and because the IRS has no legal capacity to sue or be sued,^[21] the IRS is not a federal government agency. Some claim it is a Puerto Rican trust. ^[22] The courts have uniformly rejected such arguments as a basis for not filing a tax return or paying tax.

Tax lawyers at the IRS

Most tax lawyers employed at the IRS are part of the Office of Chief Counsel, either in the home office in Washington, D. C. , or in the field. Rulemaking occurs in the home office in various divisions such as Passthroughs and Special Industries, Financial Institutions, Large and Mid Size Business, Tax Exempt and others. Litigators can be found in the field where the Service finds taxpayers who have been given notice of deficiencies.

See also

• Taxation in the United States
• Federal tax revenue by state
• Non-profit corporation
• United States of America non-profit laws
• 501(c)(3)
• 527 group
• IRS reclassification as an employee
• United States Department of Justice Tax Division
• Secretaría de Hacienda (México) (the ministry in charge of collecting taxes in Mexico)

Notes

Further reading

• Davis, Shelley L. ; Matalin, Mary. Unbridled Power: Inside the Secret Culture of the IRS. New York: Harper Collins. ISBN 0-88730-829-5.  
• Johnston, David Cay (2003). David Cay Johnston (born 1948 is an investigative Journalist and author Perfectly Legal: The Covert Campaign to Rig Our Tax System to Benefit the Super Rich - and Cheat Everybody Else. New York: Portfolio. ISBN 1-59184-019-8.  
• Rossotti, Charles O. (2005). Many Unhappy Returns: One Man's Quest To Turn Around The Most Unpopular Organization In America. Cambridge: Harvard Business School Press. ISBN 1-59139-441-4.  
• Roth, William V., Jr.; Nixon, William H. For the United States Trade Representative see William M Roth. (1999). The Power to Destroy. New York: Atlantic Monthly Press. ISBN 0-87113-748-8.  

External links

• Internal Revenue Service Official website
• Internal Revenue Service Careers Web Official IRS careers website
• Tax Protester FAQ by Dan Evans rebuts claims of the illegitimacy of the income tax and the IRS
• IRS Property Auctions How to buy from the IRS