Internal Revenue Service

The Internal Revenue Service ( IRS abbreviation ) is the Internal Revenue Service of the United States and is subordinated to the Ministry of Finance. It was founded in 1913 in the wake of the adoption of the 16th Amendment to the U.S. Constitution.

The purpose of the Authority is the collection of all federal taxes, as well as investigations in criminal tax matters and debt collection. The IRS has 100,000 employees and a budget of 10 billion U.S. dollars ( 2007). Head of agency as Commissioner of Internal Revenue Douglas H. Shulman currently. The Internal Revenue Service IRS has its headquarters on Constitution Avenue in Washington, DC

History

In 1862 it was decided by President Abraham Lincoln and Congress to create a new authority, which should raise the newly created income tax.

The authority that was established to collect and enforce taxes, represented a contrast to the other American institutions, as was always accessible there to external tax revenue by the state (eg customs duties on goods that have been imported ). Ten years later, the income tax was repealed.

In 1894, the income tax has been introduced again by Congress, but a short time it was decided by the Supreme Court in the case of Pollock v. Farmers' Loan & Trust Co., that taxes on Vermögungszuwächse, dividends, interest, rents or rents and any kind of taxes on wealth as a direct tax in the prescribed design were unconstitutional. The Congress has no power to levy direct taxes without consideration of population distribution in the states or collect. In response to the judgment of 1913, the 16th Amendment to the Constitution was adopted, the Congress was given the express authority to levy taxes on income in any form whatsoever without considering the population numbers. 1918 to finance the First World War, the top tax rate increased to 77%. During the postwar years, the tax rate then declined again to 24%, but rose again during the Great Depression.

In the fight against organized crime, the IRS has a key role; so it was possible in 1930 to prosecute Al Capone and Frank Nitti, heads the so-called " Chicago Outfit ". In particular, Capone, the never murder or murder job could be detected was due to the net cost method; that is, the demonstrable cost of living did not fit his tax returns, ultimately sentenced to a prison of 11 years. This work is now carried out by a special tax investigation authority of the IRS, the " IRS Criminal Investigation Division " (CI ).

During the Second World War, the Congress sat through an emergency measure to improve the budget. In this respect, wage payments were initially withheld and deducted quarterly tax payments.

In the 1950s, the head of the tax authority were replaced by professional employees. Currently, only the head of the authority appointed by the President and confirmed by the Senate. The tax authority changed its name again and is called since then " Internal Revenue Service". It should the term 'Service' to emphasize a positive attitude to the taxpayer.

Organization

As byproducts, the IRS and as a result of the new 1998 restructuring plan, the Authority now operates under the following four broad divisions:

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

There is also the prosecution of tax offenses:

• IRS Criminal Investigation Division (CI )