When tax time rolls around, many people experience a gripping fear about whether or not their taxes are accurate and complete. Understanding how the IRS works is one way to alleviate some of its mystery and will help you know what to do if the powerful government agency turns its eye your way.
A Brief History
Following the passage of the Revenue Act of 1862 and subsequent creation of the Commissioner of Internal Revenue’s post, the first income taxes were levied as an antidote to the costs of Civil War. Back then, incomes between $600 and $10,000 paid a 3% tax, while a 5% tax was levied on incomes above $10,000. The Bureau of Internal Revenue provided the ways and means to collect taxes and was the predecessor to today’s Internal Revenue Service.
Organization of the IRS
The Internal Revenue Service falls under the jurisdiction of the Department of Treasury and employs more than 115,000 people. The IRS is based in Washington D.C., with supporting “campuses” across the country. The service is overseen by the Commissioner of Internal Revenue, who is appointed by the president and confirmed by the Senate. The office of Chief Counsel serves as adviser, and a nine-member oversight board ensures taxpayer fairness and reviews the future plans of the IRS. In 2000, the overburdened tax agency was divided into four main divisions: Continue reading