United States Internal Revenue Service

United States Internal Revenue Service
Agency name	Internal Revenue Service
Formed	1862
Preceding1	Bureau of Internal Revenue
Jurisdiction	United States
Headquarters	Washington, D.C.
Employees	79,000
Chief1 name	Commissioner of Internal Revenue
Parent agency	United States Department of the Treasury

United States Internal Revenue Service The Internal Revenue Service administers federal Internal revenue law and collects United States federal taxation under statutes such as the Internal Revenue Code and directives from the United States Department of the Treasury, interacting with institutions like the United States Congress, United States Department of Justice, United States Court of Federal Claims and United States Tax Court. It serves taxpayers including individuals, corporations like Apple Inc., ExxonMobil, and entities involved with programs linked to the Social Security Administration and Medicare. The agency's actions intersect with decisions from the Supreme Court of the United States, rulings in D.C. Circuit and policy debates in the United States Senate and United States House of Representatives.

History

The agency traces roots to the Revenue Act of 1862 and establishment of the Office of Commissioner of Internal Revenue during the American Civil War, with early administration shaped by figures connected to the Lincoln administration and policies that funded the Union (American Civil War) war effort. During the Progressive Era and under statutes like the Revenue Act of 1913, the bureau evolved into the modern IRS, later restructured during the Treasury reorganization of 1950s and reforms following reports from entities such as the Government Accountability Office and commissions formed after controversies like the Teapot Dome scandal and tax policy debates led by members of the United States Congress. Landmark events affecting the agency include litigation before the Supreme Court of the United States, regulatory responses to the Great Depression, tax changes during the Reagan administration and the Tax Cuts and Jobs Act of 2017, and administrative reforms inspired by recommendations from the Warren Commission-era panels and the Advisory Committee on Tax Exempt and Government Entities.

Organization and Leadership

The agency operates within the United States Department of the Treasury under leadership appointed by the President of the United States and confirmed by the United States Senate. The Commissioner of Internal Revenue reports to the Secretary of the Treasury and coordinates with offices including the Office of Chief Counsel (IRS), the Taxpayer Advocate Service, and divisions responding to legislation from committees such as the United States House Committee on Ways and Means and the United States Senate Committee on Finance. Regional and functional units echo structures seen in agencies like the Federal Bureau of Investigation and Social Security Administration, maintaining field offices in major cities such as New York City, Los Angeles, and Chicago. Leadership has at times been influenced by appointees with prior roles at institutions like the Department of Justice, Internal Revenue Service Criminal Investigation Division, and multinational corporations such as Goldman Sachs.

Functions and Operations

Core functions include processing returns under the Internal Revenue Code, issuing forms similar to Form 1040 and Form W-2, administering credits influenced by legislation from the United States Congress such as the Economic Stimulus Act of 2008 and the Coronavirus Aid, Relief, and Economic Security Act. The agency enforces filing obligations for entities ranging from small businesses to multinational corporations like Amazon (company) and Walmart. It issues guidance via notices and revenue rulings that interact with judicial interpretations from courts including the United States Court of Appeals for the Federal Circuit and the Supreme Court of the United States. Operational components coordinate with the Internal Revenue Service Criminal Investigation and cooperate with international counterparts like Her Majesty's Revenue and Customs, Canada Revenue Agency, and the Organisation for Economic Co-operation and Development on cross-border tax matters.

Tax Administration and Enforcement

Enforcement tools include audits, collections, liens, levies, and criminal referrals involving the United States Department of Justice and federal prosecutors. The agency conducts examinations using statistical models and compliance projects similar to initiatives by the Government Accountability Office and reports to oversight bodies including the Congressional Budget Office. Enforcement actions have implicated major cases adjudicated in venues such as the United States Tax Court and influenced by statutes including the Tax Reform Act and court decisions like those in United States v. Windsor and other landmark rulings affecting taxable status and compliance standards. Interagency collaboration occurs with the Department of Homeland Security and financial regulators like the Federal Reserve System on matters including anti-money laundering and tax treaty enforcement.

Budget, Funding, and Staffing

Funding is appropriated by the United States Congress and overseen in budget hearings held by the House Committee on Appropriations and the Senate Appropriations Committee, with appropriations influenced by fiscal policies from administrations including those of Barack Obama and Donald Trump. Staffing levels and labor relations involve unions such as the National Treasury Employees Union and have been affected by sequestration, austerity measures, and legislative mandates like those in the Budget Control Act of 2011. The agency's budget supports programs ranging from taxpayer services to enforcement initiatives and is audited by the Government Accountability Office and reviewed by inspectors general such as the Treasury Inspector General for Tax Administration.

Controversies and Criticism

The agency has faced controversies including allegations of political targeting addressed in investigations by committees like the House Committee on Oversight and Government Reform, scrutiny over information security after breaches akin to incidents at Office of Personnel Management, disputes over the processing of returns tied to events such as the 2008 financial crisis, and litigation involving entities like Miller v. United States. Criticisms from policymakers including members of the United States Senate have focused on taxpayer rights, bureaucratic complexity, and enforcement disparities highlighted in reports by the Bipartisan Policy Center and academic studies from institutions like Harvard University and Stanford University.

Modernization and Technology

Modernization efforts encompass digital filing systems, modernization programs influenced by recommendations from the National Taxpayer Advocate and technology initiatives comparable to projects at United States Citizenship and Immigration Services and Social Security Administration. The agency collaborates with private sector firms such as Microsoft and IBM on data analytics, cloud services, and cybersecurity frameworks informed by standards from National Institute of Standards and Technology and coordination with agencies like the Cybersecurity and Infrastructure Security Agency. Ongoing projects aim to improve interoperability with international partners like the Organisation for Economic Co-operation and Development and to implement reforms resulting from commissions and reports by the Government Accountability Office.

Category:United States federal executive departments and agencies