Internal Revenue Service

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Internal Revenue Service
- IRS -

Logo of the Internal Revenue Service.svg
State level United States Federal Agency
position Tax authority
Supervisory authority Ministry of Finance
founding July 9, 1913
Headquarters Washington, DC
Authority management Commissioner Charles Rettig
Servants 74,454 (2019)
Web presence www.irs.gov

The Internal Revenue Service (abbreviation IRS ) is the federal tax service of the United States and reports to the Treasury Department . It was founded in 1913 following the passage of the 16th Amendment to the American Constitution .

As early as 1862 to 1872, a predecessor agency set up by Abraham Lincoln under the name Office of Commissioner of Internal Revenue existed at the federal level, with which the northern states first financed the civil war against the southern states that lasted from 1861 to 1865 and then the reintegration of the southern states . From this predecessor authority, today's IRS derives its official founding date, although no federal taxes were levied in the USA between 1872 and 1913.

The task of the authority is to collect all federal taxes as well as investigations in criminal tax matters and debt collection. The IRS has 74,454 employees and a budget of about 11.3 billion US dollars (as of 2019). Head of agency is the Commissioner of Internal Revenue currently Charles P. Rettig. The IRS is based on Constitution Avenue in Washington, DC

history

In 1862, President Abraham Lincoln and Congress decided to create a new agency to collect the newly created income tax.

The agency, which was set up to collect and enforce taxes, represented a contrast to the other American institutions, as there was always access to external tax revenue from the state (e.g. through tariffs on goods that were imported) . Ten years later the income tax was repealed.

In 1894, the income tax was reintroduced by Congress, but a short time later the Supreme Court in the Pollock v. Farmers' Loan & Trust Co. ruled that capital appreciation taxes, dividends, interest, lease or rent, and any kind of property tax as direct tax as it was designed, was unconstitutional. Congress has no power to collect or collect direct taxes without taking into account the distribution of the population in the states. In response to the judgment, the 16th Amendment to the Constitution was passed in 1913 , giving Congress the express authority to levy taxes on income of any kind regardless of population figures. In 1918, to finance the First World War , the top tax rate was raised to 77%. In the course of the post-war years, the tax rate fell again to 24%, but rose again during the global economic crisis .

In the fight against organized crime , the IRS has a key role to play; so it was possible in 1930 to prosecute Al Capone and Frank Nitti , heads of the so-called " Chicago Outfit ". In particular, Capone, who could never be proven to have committed murder or murder, was based on the net value method; d. H. the demonstrable cost of living did not match his tax returns, ultimately sentenced to 11 years in prison. Today this work is carried out by a special tax investigation agency of the IRS, the "IRS Criminal Investigation Division" (CI).

During World War II , Congress pushed through an emergency budget improvement measure. In this regard, wage payments were initially withheld and tax payments were levied quarterly.

In the 1950s, the heads of the tax office were replaced by professional workers. At present, only the head of the authority is appointed by the President and confirmed by the Senate . The tax authority changed its name again and has been called the "Internal Revenue Service" since then. The term 'service' should underline a basic attitude that is positive for the taxpayer.

organization

As a by-product of the IRS and as a result of the new 1998 restructuring plan, the agency now operates under the following four higher-level divisions:

  • Large & Mid-Size Business (LMSB)
  • Small Business / Self-Employed (SB / SE)
  • Wage and Investment (W&I)
  • Tax Exempt & Government Entities (TE / GE)

There are also to prosecute tax offenses ( tax investigations ):

  • IRS Criminal Investigation Division (CI)

Commissioners of Internal Revenue (selection)

See also

literature

  • Shelley L. Davis, Mary Matalin: Unbridled Power: Inside the Secret Culture of the IRS . Harper Collins, New York, ISBN 0-88730-829-5 .
  • David Cay Johnston : Perfectly Legal: The Covert Campaign to Rig Our Tax System to Benefit the Super Rich - and Cheat Everybody Else . Portfolio, New York 2003, ISBN 1-59184-019-8 .

Web links

Commons : United States Internal Revenue Service  - collection of pictures, videos and audio files

Individual evidence

  1. ^ Office of Commissioner of Internal Revenue (Created by an act of Congress, July 1, 1862) . US Internal Revenue Service. Archived from the original on October 31, 2011. Retrieved July 23, 2012.
  2. ↑ [1]
  3. ↑ IRS - Criminal Investigation (CI) At-a-Glance (English)