Small Business/Self-Employed Division

Small Business/Self-Employed Division
Name	Small Business/Self-Employed Division
Formed	2000
Jurisdiction	United States
Headquarters	Washington, D.C.
Parent agency	Internal Revenue Service
Chief1 position	Commissioner, Internal Revenue Service
Website	[https://www.irs.gov/businesses/small-businesses-self-employed IRS Small Business and Self-Employed Division]

Small Business/Self-Employed Division. It is a major operating division within the Internal Revenue Service responsible for tax administration and compliance for the nation's small business and self-employed taxpayers. The division serves a vast segment of the American economy, encompassing tens of millions of filers including sole proprietorships, partnerships, and corporations with assets under $10 million. Its mission focuses on providing taxpayer education, service, and enforcement to ensure compliance with the Internal Revenue Code.

Overview

The division is one of four primary operating divisions of the Internal Revenue Service, alongside the Wage and Investment Division, Large Business and International Division, and Tax Exempt and Government Entities Division. Its jurisdiction covers approximately 57 million taxpayers, including entities filing Schedule C, Schedule E, and Schedule F, as well as small corporations and S corporations. The division's work is critical to the United States Department of the Treasury's revenue collection, addressing the unique compliance challenges of this diverse and dynamic sector of the American economy.

History

The Small Business/Self-Employed Division was formally established in the year 2000 as part of a major restructuring of the Internal Revenue Service under the IRS Restructuring and Reform Act of 1998. This reorganization, championed by figures like Senator William V. Roth Jr., aimed to modernize the agency and create customer-focused units. Prior to this, small business tax administration was handled through geographically organized districts. The creation of this dedicated division centralized expertise and resources to better serve what was recognized as a distinct and growing taxpayer segment, a trend highlighted in reports from the Government Accountability Office.

Structure and function

The division is headquartered in Washington, D.C. and operates through a network of field offices across the country, including Service Centers like those in Austin and Fresno. It is organized into functional units such as Examination, Collection, and Appeals, which handle audits, delinquent account collection, and dispute resolution, respectively. Key operational components include the Office of Fraud Enforcement and the Office of Professional Responsibility, which oversee specific compliance areas. The division works in close coordination with other Internal Revenue Service units like the Criminal Investigation Division.

Key initiatives and programs

The division administers several targeted programs to improve compliance and service. These include the Voluntary Disclosure Practice for those with unreported income and the Fresh Start Initiative to help taxpayers settle tax debts. It runs the Taxpayer Advocate Service, an independent organization within the Internal Revenue Service that assists taxpayers experiencing significant hardship. Other significant efforts focus on specific industries, such as the Shared Economy Tax Center for gig economy workers and compliance campaigns for cash-intensive businesses, often developed using data from the National Research Program.

Taxpayer services and compliance

A primary function is providing education and tools to help taxpayers understand their obligations under the Internal Revenue Code. This includes maintaining extensive online resources on IRS.gov, conducting outreach events with groups like the National Association of Tax Professionals, and operating the IRS Taxpayer Assistance Center network. On the enforcement side, the division conducts examinations, manages the Offer in Compromise program, and addresses issues like employment tax non-compliance and abusive tax schemes, often in partnership with the United States Tax Court.

Leadership and organization

The division is led by a Commissioner who reports to the Commissioner of Internal Revenue. This position has been held by various senior executives within the Internal Revenue Service. The leadership team includes deputies overseeing areas like Collection and Examination, as well as counsel from the Office of Chief Counsel. The division's strategic direction is influenced by oversight bodies including the United States Congress, the Treasury Inspector General for Tax Administration, and the IRS Oversight Board.

Impact and statistics

The division interacts with a taxpayer base that files millions of returns annually, contributing significantly to total Internal Revenue Service receipts. Its enforcement activities, including audits and collections, generate substantial revenue, with detailed statistics published in the IRS Data Book. The division's effectiveness in reducing the tax gap—the difference between taxes owed and paid—is a constant focus for the United States Department of the Treasury and congressional committees like the United States House Committee on Ways and Means. Its performance metrics are closely tracked by the Government Accountability Office. Category:Internal Revenue Service Category:United States Department of the Treasury agencies Category:Small business in the United States