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{{Organization
|OrganizationName=Internal Revenue Service
|OrganizationType=Executive Departments (Sub-organization)
|Mission=The IRS serves America's taxpayers by helping them understand and meet their tax responsibilities and enforcing the law with integrity and fairness to all. It administers and enforces federal tax laws.
|ParentOrganization=United States Department of the Treasury
|CreationLegislation=Revenue Act of 1862
|Employees=78000
|Budget=$12.3 billion (Fiscal Year 2024)
|OrganizationExecutive=Commissioner of Internal Revenue
|Services=Tax collection; Taxpayer assistance; Tax law enforcement; Taxpayer education; Tax return processing
|HeadquartersLocation=38.8934, -77.02702
|HeadquartersAddress=1111 Constitution Ave NW, Washington, DC 20224, USA
|Website=https://www.irs.gov
}}
{{Short description|Revenue service of the US federal government}}
{{Short description|Revenue service of the US federal government}}
{{Redirect|IRS}}
 
{{Use mdy dates|date=April 2016}}
{{Infobox government agency
{{Infobox government agency
| agency_name    = Internal Revenue Service
| agency_name    = Internal Revenue Service
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| footnotes      =  
| footnotes      =  
}}
}}
{{UStaxation}}
The '''Internal Revenue Service''' ('''IRS''') is the [[revenue service]] for the [[Federal government of the United States|United States federal government]], which is responsible for collecting [[Taxation in the United States|U.S. federal taxes]] and administering the [[Internal Revenue Code]], the main body of the federal statutory tax law. It is an agency of the [[United States Department of the Treasury|Department of the Treasury]] and led by the [[Commissioner of Internal Revenue]], who is appointed to a five-year term by the President of the United States. The duties of the IRS include providing tax assistance to taxpayers; pursuing and resolving instances of erroneous or fraudulent tax filings; and overseeing various benefits programs, including the [[Affordable Care Act]].<ref>{{cite web|url=https://www.irs.gov/Affordable-Care-Act/Affordable-Care-Act-Tax-Provisions|title=Affordable Care Act Tax Provisions |website=Internal Revenue Service}}</ref>
The '''Internal Revenue Service''' ('''IRS''') is the [[revenue service]] for the [[Federal government of the United States|United States federal government]], which is responsible for collecting [[Taxation in the United States|U.S. federal taxes]] and administering the [[Internal Revenue Code]], the main body of the federal statutory tax law. It is an agency of the [[United States Department of the Treasury|Department of the Treasury]] and led by the [[Commissioner of Internal Revenue]], who is appointed to a five-year term by the President of the United States. The duties of the IRS include providing tax assistance to taxpayers; pursuing and resolving instances of erroneous or fraudulent tax filings; and overseeing various benefits programs, including the [[Affordable Care Act]].<ref>{{cite web|url=https://www.irs.gov/Affordable-Care-Act/Affordable-Care-Act-Tax-Provisions|title=Affordable Care Act Tax Provisions |website=Internal Revenue Service}}</ref>


[[File:IRS Sign.JPG|thumb|IRS location sign at Constitution Avenue, Washington, D.C.]]
[[File:IRS Sign.JPG|thumb|IRS location sign at Constitution Avenue, Washington, D.C.]]


The IRS originates from the '''Commissioner of Internal Revenue''', a federal office created in 1862 to assess the nation's first [[income tax]] to fund the [[American Civil War]]. The temporary measure funded over a fifth of the Union's war expenses before being allowed to expire a decade later. In 1913, the [[Sixteenth Amendment to the United States Constitution|Sixteenth Amendment to the U.S. Constitution]] was ratified, authorizing Congress to impose a tax on income and leading to the creation of the '''Bureau of Internal Revenue'''. In 1953, the agency was renamed the Internal Revenue Service, and in subsequent decades underwent numerous reforms and reorganizations, most significantly in the 1990s.
The IRS originates from the '''Commissioner of Internal Revenue''', a federal office created in 1862 to assess the nation's first [[income tax]] to fund the American Civil War. The temporary measure funded over a fifth of the Union's war expenses before being allowed to expire a decade later. In 1913, the [[Sixteenth Amendment to the United States Constitution|Sixteenth Amendment to the U.S. Constitution]] was ratified, authorizing Congress to impose a tax on income and leading to the creation of the '''Bureau of Internal Revenue'''. In 1953, the agency was renamed the Internal Revenue Service, and in subsequent decades underwent numerous reforms and reorganizations, most significantly in the 1990s.


Since its establishment, the IRS has been largely responsible for collecting the revenue needed to fund the United States federal government, with the rest being funded either through the [[U.S. Customs and Border Protection]] (collecting [[Duty (tax)|duties]] and [[tariff]]s) or the [[Federal Reserve]] (purchasing [[United States Treasury security|U.S. treasuries]]).<ref>{{Cite web |last1=Faria e Castro |first1=Miguel |last2=Jordan-Wood |first2=Samuel |date=November 21, 2023 |title=The Fed's Remittances to the Treasury: Explaining the 'Deferred Asset' |url=https://www.stlouisfed.org/on-the-economy/2023/nov/fed-remittances-treasury-explaining-deferred-asset |archive-url=https://web.archive.org/web/20240327151852/https://www.stlouisfed.org/on-the-economy/2023/nov/fed-remittances-treasury-explaining-deferred-asset |archive-date=March 27, 2024 |access-date=2024-05-01 |website=www.stlouisfed.org |language=en}}</ref> The IRS faces periodic [[IRS targeting controversy|controversy]] and opposition over its methods, constitutionality, and the [[Taxation as theft|principle of taxation]] generally. In recent years, the agency has struggled with budget cuts, under-staffed workforce, outdated technology and reduced morale, all of which collectively result in the inappropriate enforcement of tax laws against [[Wealth inequality in the United States|high earners]] and large [[corporation]]s, reduced tax collection, rising [[Government budget balance|deficits]], lower [[Government spending|spending]] on important priorities, or further tax increases on compliant [[tax]]payers to compensate for lost [[revenue]].<ref>{{cite web|title=ACTC letter to Congressional-Leadership|url=https://www.actconline.org/wp-content/uploads/2014/05/ACTC-letter-to-Congressional-Leadership.pdf|website=American College Of Tax Counsel |date=July 13, 2016}}</ref><ref>{{Cite web |date=2024-06-24 |title=The Case for a Robust Attack on the Tax Gap |url=https://home.treasury.gov/news/featured-stories/the-case-for-a-robust-attack-on-the-tax-gap |access-date=2024-07-11 |website=U.S. Department of the Treasury |language=en}}</ref> Research shows that IRS audits raise revenue, both through the initial audit and indirectly by deterring future tax cheating.<ref name=":02">{{Cite report |url=http://dx.doi.org/10.3386/w31376 |title=A Welfare Analysis of Tax Audits Across the Income Distribution |last=Boning |first=William |last2=Hendren |first2=Nathaniel |date=2024 |publisher=The Quarterly Journal of Economics |last3=Sprung-Keyser |first3=Ben |last4=Stuart |first4=Ellen}}</ref> According to a 2024 study, "an additional $1 spent auditing taxpayers above the 90th income percentile yields more than $12 in revenue, while audits of below-median income taxpayers yield $5."<ref name=":02" />
Since its establishment, the IRS has been largely responsible for collecting the revenue needed to fund the United States federal government, with the rest being funded either through the [[U.S. Customs and Border Protection]] (collecting [[Duty (tax)|duties]] and [[tariff]]s) or the [[Federal Reserve]] (purchasing [[United States Treasury security|U.S. treasuries]]).<ref>{{Cite web |last1=Faria e Castro |first1=Miguel |last2=Jordan-Wood |first2=Samuel |date=November 21, 2023 |title=The Fed's Remittances to the Treasury: Explaining the 'Deferred Asset' |url=https://www.stlouisfed.org/on-the-economy/2023/nov/fed-remittances-treasury-explaining-deferred-asset |archive-url=https://web.archive.org/web/20240327151852/https://www.stlouisfed.org/on-the-economy/2023/nov/fed-remittances-treasury-explaining-deferred-asset |archive-date=March 27, 2024 |access-date=2024-05-01 |website=www.stlouisfed.org |language=en}}</ref> The IRS faces periodic [[IRS targeting controversy|controversy]] and opposition over its methods, constitutionality, and the [[Taxation as theft|principle of taxation]] generally. In recent years, the agency has struggled with budget cuts, under-staffed workforce, outdated technology and reduced morale, all of which collectively result in the inappropriate enforcement of tax laws against [[Wealth inequality in the United States|high earners]] and large [[corporation]]s, reduced tax collection, rising [[Government budget balance|deficits]], lower [[Government spending|spending]] on important priorities, or further tax increases on compliant [[tax]]payers to compensate for lost [[revenue]].<ref>{{cite web|title=ACTC letter to Congressional-Leadership|url=https://www.actconline.org/wp-content/uploads/2014/05/ACTC-letter-to-Congressional-Leadership.pdf|website=American College Of Tax Counsel |date=July 13, 2016}}</ref><ref>{{Cite web |date=2024-06-24 |title=The Case for a Robust Attack on the Tax Gap |url=https://home.treasury.gov/news/featured-stories/the-case-for-a-robust-attack-on-the-tax-gap |access-date=2024-07-11 |website=U.S. Department of the Treasury |language=en}}</ref> Research shows that IRS audits raise revenue, both through the initial audit and indirectly by deterring future tax cheating.<ref name=":02">{{Cite report |url=http://dx.doi.org/10.3386/w31376 |title=A Welfare Analysis of Tax Audits Across the Income Distribution |last=Boning |first=William |last2=Hendren |first2=Nathaniel |date=2024 |publisher=The Quarterly Journal of Economics |last3=Sprung-Keyser |first3=Ben |last4=Stuart |first4=Ellen}}</ref> According to a 2024 study, "an additional $1 spent auditing taxpayers above the 90th income percentile yields more than $12 in revenue, while audits of below-median income taxpayers yield $5."<ref name=":02" />
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==History==
==History==
{{see also|Taxation history of the United States}}
===American Civil War (1861–1865)===
===American Civil War (1861–1865)===
[[File:George S. Boutwell, the first Commissioner of Internal Revenue Service.jpg|thumb|[[George S. Boutwell]] was the first [[Commissioner of Internal Revenue]] under President [[Abraham Lincoln]].]]
In July 1862, during the American Civil War, [[President of the United States|President]] Abraham Lincoln and [[United States Congress|Congress]] passed the [[Revenue Act of 1862]], creating the office of Commissioner of Internal Revenue and enacting a temporary [[income tax]] to pay war expenses.
In July 1862, during the [[American Civil War]], [[President of the United States|President]] [[Abraham Lincoln]] and [[United States Congress|Congress]] passed the [[Revenue Act of 1862]], creating the office of Commissioner of Internal Revenue and enacting a temporary [[income tax]] to pay war expenses.


The Revenue Act of 1862 was passed as an emergency and temporary war-time tax. It copied a relatively new British system of income taxation, instead of trade and property taxation. The first income tax was passed in 1862:
The Revenue Act of 1862 was passed as an emergency and temporary war-time tax. It copied a relatively new British system of income taxation, instead of trade and property taxation. The first income tax was passed in 1862:
*The initial rate was 3% on income over $800, which exempted most wage-earners.
*The initial rate was 3% on income over $800, which exempted most wage-earners.
*In 1862 the rate was 3% on income between $600 and $10,000, and 5% on income over $10,000.
*In 1862 the rate was 3% on income between $600 and $10,000, and 5% on income over $10,000.
By the end of the war, 10% of [[Union (American Civil War)|Union]] households had paid some form of income tax, and the Union raised 21% of its war revenue through income taxes.<ref>{{cite web |url=http://www.tax.org/Museum/1861-1865.htm |title=1861–1865: The Civil War |publisher=Tax.org |access-date=August 9, 2010 |archive-date=February 16, 2011 |archive-url=https://web.archive.org/web/20110216062329/http://www.tax.org/Museum/1861-1865.htm  }}</ref>
By the end of the war, 10% of Union households had paid some form of income tax, and the Union raised 21% of its war revenue through income taxes.<ref>{{cite web |url=http://www.tax.org/Museum/1861-1865.htm |title=1861–1865: The Civil War |publisher=Tax.org |access-date=August 9, 2010 |archive-date=February 16, 2011 |archive-url=https://web.archive.org/web/20110216062329/http://www.tax.org/Museum/1861-1865.htm  }}</ref>


===Post Civil War, Reconstruction, and popular tax reform (1866–1913)===
===Post Civil War, Reconstruction, and popular tax reform (1866–1913)===
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Income taxes evolved, but in 1894 the [[Supreme Court of the United States|Supreme Court]] declared the Income Tax of 1894 unconstitutional in ''[[Pollock v. Farmers' Loan & Trust Co.]]'', a decision that contradicted ''[[Hylton v. United States]]''.<ref>3 U.S. 171 (1796).</ref> The federal government scrambled to raise money.<ref>{{cite web |url=http://www.tax.org/Museum/1866-1900.htm |title=1866–1900: Reconstruction to the Spanish–American War |publisher=Tax.org |access-date=August 9, 2010  |archive-url=https://web.archive.org/web/20100814151715/http://www.tax.org/museum/1866-1900.htm |archive-date=August 14, 2010 }}</ref>
Income taxes evolved, but in 1894 the [[Supreme Court of the United States|Supreme Court]] declared the Income Tax of 1894 unconstitutional in ''[[Pollock v. Farmers' Loan & Trust Co.]]'', a decision that contradicted ''[[Hylton v. United States]]''.<ref>3 U.S. 171 (1796).</ref> The federal government scrambled to raise money.<ref>{{cite web |url=http://www.tax.org/Museum/1866-1900.htm |title=1866–1900: Reconstruction to the Spanish–American War |publisher=Tax.org |access-date=August 9, 2010  |archive-url=https://web.archive.org/web/20100814151715/http://www.tax.org/museum/1866-1900.htm |archive-date=August 14, 2010 }}</ref>


In 1906, with the election of President [[Theodore Roosevelt]], and later his successor [[William Howard Taft]], the United States saw a [[Populism|populist]] movement for tax reform. This movement culminated during then-candidate [[Woodrow Wilson]]'s election of 1912 and in February 1913, the ratification of the [[Sixteenth Amendment to the United States Constitution]]:
In 1906, with the election of President Theodore Roosevelt, and later his successor [[William Howard Taft]], the United States saw a [[Populism|populist]] movement for tax reform. This movement culminated during then-candidate [[Woodrow Wilson]]'s election of 1912 and in February 1913, the ratification of the [[Sixteenth Amendment to the United States Constitution]]:


{{blockquote|The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.}}
{{blockquote|The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.}}
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===Post 16th Amendment (1913–present)===
===Post 16th Amendment (1913–present)===
Though the constitutional amendment to allow the federal government to collect income taxes was proposed by [[William Howard Taft|President Taft]] in 1909, the [[Sixteenth Amendment to the United States Constitution|16th Amendment]] was not ratified until 1913, just before the start of the [[World War I|First World War]]. That same year, the first edition of the 1040 form was introduced. A copy of the 1913 form can be viewed online<ref>{{cite web|url=https://www.irs.gov/pub/irs-utl/1913.pdf |title=The first 1040 with instructions |access-date=November 8, 2011|archive-url=https://web.archive.org/web/20230523143545/https://www.irs.gov/pub/irs-utl/1913.pdf | archive-date=May 23, 2023}}</ref><ref>{{cite web |title=A scanned copy of the first 1040 form, from the US Library of Congress Blogs |url=https://blogs.loc.gov/law/files/2017/04/Historic-Form-1040-pg1-2.jpg |url-status=live |archive-url=https://web.archive.org/web/20230518090918/https://blogs.loc.gov/law/2017/04/the-first-form-1040/ |archive-date=May 18, 2023 |website=Library Of Congress}}</ref> and shows that only those with annual incomes of at least $3,000 ({{inflation|USD|3000|1913|fmt=eq|r=-2}}) were instructed to file an income tax return.
Though the constitutional amendment to allow the federal government to collect income taxes was proposed by [[William Howard Taft|President Taft]] in 1909, the [[Sixteenth Amendment to the United States Constitution|16th Amendment]] was not ratified until 1913, just before the start of the [[World War I|First World War]]. That same year, the first edition of the 1040 form was introduced. A copy of the 1913 form can be viewed online<ref>{{cite web|url=https://www.irs.gov/pub/irs-utl/1913.pdf |title=The first 1040 with instructions |access-date=November 8, 2011|archive-url=https://web.archive.org/web/20230523143545/https://www.irs.gov/pub/irs-utl/1913.pdf | archive-date=May 23, 2023}}</ref><ref>{{cite web |title=A scanned copy of the first 1040 form, from the US Library of Congress Blogs |url=https://blogs.loc.gov/law/files/2017/04/Historic-Form-1040-pg1-2.jpg |url-status=live |archive-url=https://web.archive.org/web/20230518090918/https://blogs.loc.gov/law/2017/04/the-first-form-1040/ |archive-date=May 18, 2023 |website=Library Of Congress}}</ref> and shows that only those with annual incomes of at least $3,000 were instructed to file an income tax return.


In the first year after the ratification of the 16th Amendment, no taxes were collected. Instead, taxpayers simply completed the form and the IRS checked the form for accuracy. The IRS's workload jumped by ten-fold, triggering a massive restructuring. Professional tax collectors began to replace a system of "patronage" appointments. The IRS doubled its staff but was still processing 1917 returns in 1919.<ref>{{cite web |url=http://www.tax.org/Museum/1901-1932.htm |title=1901–1932: The Income Tax Arrives |publisher=Tax.org |date=April 14, 1906 |access-date=August 9, 2010  |archive-url=https://web.archive.org/web/20100814150842/http://www.tax.org/museum/1901-1932.htm |archive-date=August 14, 2010 }}</ref>
In the first year after the ratification of the 16th Amendment, no taxes were collected. Instead, taxpayers simply completed the form and the IRS checked the form for accuracy. The IRS's workload jumped by ten-fold, triggering a massive restructuring. Professional tax collectors began to replace a system of "patronage" appointments. The IRS doubled its staff but was still processing 1917 returns in 1919.<ref>{{cite web |url=http://www.tax.org/Museum/1901-1932.htm |title=1901–1932: The Income Tax Arrives |publisher=Tax.org |date=April 14, 1906 |access-date=August 9, 2010  |archive-url=https://web.archive.org/web/20100814150842/http://www.tax.org/museum/1901-1932.htm |archive-date=August 14, 2010 }}</ref>


Income tax raised much of the money required to finance the war effort; in 1918 a new Revenue Act established a top tax rate of 77%.
Income tax raised much of the money required to finance the war effort; in 1918 a new Revenue Act established a top tax rate of 77%.
[[File:1920 tax forms IRS.jpg|thumb|left|People filing tax forms in 1920]]


In 1919 the IRS was tasked with enforcement of laws relating to [[Prohibition in the United States|prohibition of alcohol sales and manufacture]]; this was transferred to the jurisdiction of the Department of Justice in 1930. After repeal in 1933, the IRS resumed collection of taxes on beverage alcohol.<ref name=IRSHL>{{cite web|url=https://www.irs.gov/newsroom/historical-highlights-of-the-irs |title=Historical highlights of the IRS|access-date=October 6, 2017}}</ref> The alcohol, tobacco and firearms activities of the bureau were segregated into the [[Bureau of Alcohol, Tobacco, Firearms and Explosives]] in 1972.
In 1919 the IRS was tasked with enforcement of laws relating to [[Prohibition in the United States|prohibition of alcohol sales and manufacture]]; this was transferred to the jurisdiction of the Department of Justice in 1930. After repeal in 1933, the IRS resumed collection of taxes on beverage alcohol.<ref name=IRSHL>{{cite web|url=https://www.irs.gov/newsroom/historical-highlights-of-the-irs |title=Historical highlights of the IRS|access-date=October 6, 2017}}</ref> The alcohol, tobacco and firearms activities of the bureau were segregated into the [[Bureau of Alcohol, Tobacco, Firearms and Explosives]] in 1972.
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From May 22, 2013, to December 23, 2013, senior official at the [[Office of Management and Budget]] [[Daniel Werfel]] was acting Commissioner of Internal Revenue.<ref name="WH press release 2013">[https://obamawhitehouse.archives.gov/the-press-office/2013/05/16/president-obama-appoints-daniel-werfel-acting-commissioner-internal-reve President Obama Appoints Daniel Werfel as Acting Commissioner of Internal Revenue], May 16, 2013</ref> Werfel, who attended law school at the [[University of North Carolina]] and attained a master's degree from [[Duke University]], prepared the government for a potential shutdown in 2011 by determining which services that would remain in existence.<ref name="WH press release 2013"/><ref>{{cite news|title=Daniel Werfel replaces Miller as acting IRS commissioner|url=https://www.washingtonpost.com/blogs/post-politics/wp/2013/05/16/daniel-werfel-to-replace-miller-as-acting-irs-commissioner/|access-date=May 16, 2013|newspaper=The Washington Post|date=May 16, 2013|author=Zachary A. Goldfarb|author2=Aaron Blake}}</ref>
From May 22, 2013, to December 23, 2013, senior official at the [[Office of Management and Budget]] [[Daniel Werfel]] was acting Commissioner of Internal Revenue.<ref name="WH press release 2013">[https://obamawhitehouse.archives.gov/the-press-office/2013/05/16/president-obama-appoints-daniel-werfel-acting-commissioner-internal-reve President Obama Appoints Daniel Werfel as Acting Commissioner of Internal Revenue], May 16, 2013</ref> Werfel, who attended law school at the [[University of North Carolina]] and attained a master's degree from [[Duke University]], prepared the government for a potential shutdown in 2011 by determining which services that would remain in existence.<ref name="WH press release 2013"/><ref>{{cite news|title=Daniel Werfel replaces Miller as acting IRS commissioner|url=https://www.washingtonpost.com/blogs/post-politics/wp/2013/05/16/daniel-werfel-to-replace-miller-as-acting-irs-commissioner/|access-date=May 16, 2013|newspaper=The Washington Post|date=May 16, 2013|author=Zachary A. Goldfarb|author2=Aaron Blake}}</ref>


No IRS commissioner has served more than five years and one month since Guy Helvering, who served 10 years until 1943.<ref name=bloomberg1>{{cite news|title=IRS Commissioner Says He Doesn't Want Second Term|newspaper=Bloomberg|date=April 5, 2012|url=https://www.bloomberg.com/news/2012-04-05/irs-commissioner-says-he-doesn-t-want-second-term.html |last=Rubin |first=Richard }}</ref> The most recent commissioner to serve the longest term was Doug Shulman, who was appointed by President [[George W. Bush]] and served for five years.<ref name="bloomberg1"/>
No IRS commissioner has served more than five years and one month since Guy Helvering, who served 10 years until 1943.<ref name=bloomberg1>{{cite news|title=IRS Commissioner Says He Doesn't Want Second Term|newspaper=Bloomberg|date=April 5, 2012|url=https://www.bloomberg.com/news/2012-04-05/irs-commissioner-says-he-doesn-t-want-second-term.html |last=Rubin |first=Richard }}</ref> The most recent commissioner to serve the longest term was Doug Shulman, who was appointed by President George W. Bush and served for five years.<ref name="bloomberg1"/>


===Deputy commissioners===
===Deputy commissioners===
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|}


[[File:NYC IRS office by Matthew Bisanz.JPG|thumb|[[New York City]] field office for the IRS]]
[[File:NYC IRS office by Matthew Bisanz.JPG|thumb|New York City field office for the IRS]]


For fiscal year 2009, the U.S. Congress appropriated spending of approximately $12.624{{spaces}}billion of "discretionary budget authority" to operate the Department of the Treasury, of which $11.522{{spaces}}billion was allocated to the IRS. The projected estimate of the budget for the IRS for fiscal year 2011 was $12.633{{spaces}}billion.<ref>See Table, p. 115, ''Budget of the U.S. Government: Fiscal Year 2011'', Office of Management and Budget, Executive Office of the President of the United States (U.S. Gov't Printing Office, Washington, 2010), at [https://obamawhitehouse.archives.gov/sites/default/files/omb/budget/fy2011/assets/budget.pdf Whitehouse.gov] (PDF)</ref> By contrast, during Fiscal Year (FY) 2006, the IRS collected more than $2.2{{spaces}}trillion in tax (net of refunds), about 44 percent of which was attributable to the individual income tax. This is partially due to the nature of the individual income tax category, containing taxes collected from working class, small business, self-employed, and capital gains. The top 5% of income earners pay 38.284% of the federal tax collected.<ref>{{cite web |url=https://www.irs.gov/taxstats/indtaxstats/article/0,,id=129270,00.html#_mti  |archive-url=https://web.archive.org/web/20120806062016/http://www.irs.gov/taxstats/indtaxstats/article/0,,id=129270,00.html#_mti |archive-date=August 6, 2012 |title=SOI Tax Stats{{snd}}Individual Income Tax Rates and Tax Shares |website=irs.gov}}</ref><ref>[http://www.free-press-release.com/news/200710/1191980491.html 'New IRS Data Reveals That the Rich Really Do Pay Tax{{snd}}Lots of It'] by John Gaver. Press Release, Actionamerica.org, October 9, 2007.</ref>
For fiscal year 2009, the U.S. Congress appropriated spending of approximately $12.624{{spaces}}billion of "discretionary budget authority" to operate the Department of the Treasury, of which $11.522{{spaces}}billion was allocated to the IRS. The projected estimate of the budget for the IRS for fiscal year 2011 was $12.633{{spaces}}billion.<ref>See Table, p. 115, ''Budget of the U.S. Government: Fiscal Year 2011'', Office of Management and Budget, Executive Office of the President of the United States (U.S. Gov't Printing Office, Washington, 2010), at [https://obamawhitehouse.archives.gov/sites/default/files/omb/budget/fy2011/assets/budget.pdf Whitehouse.gov] (PDF)</ref> By contrast, during Fiscal Year (FY) 2006, the IRS collected more than $2.2{{spaces}}trillion in tax (net of refunds), about 44 percent of which was attributable to the individual income tax. This is partially due to the nature of the individual income tax category, containing taxes collected from working class, small business, self-employed, and capital gains. The top 5% of income earners pay 38.284% of the federal tax collected.<ref>{{cite web |url=https://www.irs.gov/taxstats/indtaxstats/article/0,,id=129270,00.html#_mti  |archive-url=https://web.archive.org/web/20120806062016/http://www.irs.gov/taxstats/indtaxstats/article/0,,id=129270,00.html#_mti |archive-date=August 6, 2012 |title=SOI Tax Stats{{snd}}Individual Income Tax Rates and Tax Shares |website=irs.gov}}</ref><ref>[http://www.free-press-release.com/news/200710/1191980491.html 'New IRS Data Reveals That the Rich Really Do Pay Tax{{snd}}Lots of It'] by John Gaver. Press Release, Actionamerica.org, October 9, 2007.</ref>
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==Labor union==
==Labor union==
{{further|Labor unions in the United States}}
Most non-supervisory employees at the IRS are represented by a labor union. The exclusive labor union at the IRS is the [[National Treasury Employees Union]] (NTEU). Employees are not required to join the union or pay dues. The IRS and NTEU have a national [[Collective agreement|collective bargaining agreement]].<ref>{{cite web |url=https://www.treasury.gov/tigta/foia/efoia-imds/chapter400-inv/400-exhibits/NTEU_IRS_Contract.pdf |title=2019 National Agreement: Internal Revenue Service and National Treasury Employees Union |publisher=National Treasury Employees Union |access-date=March 3, 2022}}</ref>
Most non-supervisory employees at the IRS are represented by a labor union. The exclusive labor union at the IRS is the [[National Treasury Employees Union]] (NTEU). Employees are not required to join the union or pay dues. The IRS and NTEU have a national [[Collective agreement|collective bargaining agreement]].<ref>{{cite web |url=https://www.treasury.gov/tigta/foia/efoia-imds/chapter400-inv/400-exhibits/NTEU_IRS_Contract.pdf |title=2019 National Agreement: Internal Revenue Service and National Treasury Employees Union |publisher=National Treasury Employees Union |access-date=March 3, 2022}}</ref>


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Employees are also required to report certain misconduct to [[Treasury Inspector General for Tax Administration|TIGTA]]. Federal law prohibits reprisal or retaliation against an employee who reports wrongdoing.<ref>{{cite web | url=http://treas.gov/tigta/about_what.shtml | title = What is TIGTA | date = December 11, 2014 | work = Treasury Inspector General for Tax Administration | publisher = [[U.S. Department of the Treasury]] | access-date=October 21, 2018}}</ref><ref>{{cite web |url=https://archive.opm.gov/ovrsight/proidx.asp |title=§ 2302. Prohibited personnel practices |publisher=U.S. Office of Personnel Management |access-date=March 3, 2022}}</ref><ref>{{cite web |last=Rajesh |first=Reddy |date=February 19, 2016 |title=Tax services |url=https://pumpkintaxco.com/ai-powered-bookkeepig/ |website=Federal Register}}</ref>
Employees are also required to report certain misconduct to [[Treasury Inspector General for Tax Administration|TIGTA]]. Federal law prohibits reprisal or retaliation against an employee who reports wrongdoing.<ref>{{cite web | url=http://treas.gov/tigta/about_what.shtml | title = What is TIGTA | date = December 11, 2014 | work = Treasury Inspector General for Tax Administration | publisher = [[U.S. Department of the Treasury]] | access-date=October 21, 2018}}</ref><ref>{{cite web |url=https://archive.opm.gov/ovrsight/proidx.asp |title=§ 2302. Prohibited personnel practices |publisher=U.S. Office of Personnel Management |access-date=March 3, 2022}}</ref><ref>{{cite web |last=Rajesh |first=Reddy |date=February 19, 2016 |title=Tax services |url=https://pumpkintaxco.com/ai-powered-bookkeepig/ |website=Federal Register}}</ref>
==Controversies==
{{see also|List of allegations of misuse of the Internal Revenue Service}}
The IRS has been accused of abusive behavior on multiple occasions.<ref name="witness">{{cite web|url=http://enzi.senate.gov/anon1.htm|title=Prepared Statement Of Witness Before The Senate Finance Committee Oversight Hearing On The Internal Revenue Service|access-date=June 17, 2007 |archive-url = https://web.archive.org/web/20070729045147/http://enzi.senate.gov/anon1.htm<!--bot retrieved archive--> |archive-date = July 29, 2007}}</ref><ref>{{cite web|url=https://www.senate.gov/~finance/davis.htm|last=Davis|first=Robert Edwin|title=Statement before the Senate Committee on Finance|access-date=June 17, 2007 |archive-url = https://web.archive.org/web/20070209113627/https://www.senate.gov/~finance/davis.htm<!--bot retrieved archive--> |archive-date = February 9, 2007}}</ref><ref>{{cite web |url=https://www.senate.gov/~enzi/schrieb.htm |last=Schriebman |first=Robert |title=Prepared Statement of Robert S. Schrieman Before the Senate Finance Committee|access-date=June 17, 2007 |archive-url = https://web.archive.org/web/20071018072341/http://senate.gov/~enzi/schrieb.htm<!--bot retrieved archive--> |archive-date = October 18, 2007}}</ref><ref>{{cite web|url=https://www.senate.gov/~enzi/davis.htm|last=Davis|first=Shelley L.|title=Prepared Statement of Shelley L. Davis Before the Senate Finance Committee Oversight Hearing On The Internal Revenue Service|date=September 23, 1997|access-date=June 17, 2007 |archive-url = https://web.archive.org/web/20070505104053/https://www.senate.gov/~enzi/davis.htm<!--bot retrieved archive--> |archive-date = May 5, 2007}}</ref> Testimony was given before a Senate subcommittee that focused on cases of overly aggressive IRS collection tactics in considering a need for legislation to give taxpayers greater protection in disputes with the agency.
Congress passed the [[Internal Revenue Service Restructuring and Reform Act of 1998|Taxpayer Bill of Rights III]] on July 22, 1998, which shifted the [[Burden of proof (law)|burden of proof]] from the taxpayer to the IRS in certain limited situations. The IRS retains the legal authority to enforce liens and seize assets without obtaining judgment in court.<ref>See {{usc|26|6331}}. For case law on section 6331, see ''Brian v. Gugin'', 853 F. Supp. 358, 94–1 U.S. Tax Cas. (CCH) paragr. 50,278 (D. Idaho 1994), ''aff'd'', 95-1 U.S. Tax Cas. (CCH) paragr. 50,067 (9th Cir. 1995).</ref>
In 2002, the IRS accused James and Pamela Moran, as well as several others, of conspiracy, filing false tax returns and mail fraud as part of the Anderson Ark investment scheme. The Morans were eventually acquitted, and their attorney stated that the government should have realized that the couple was merely duped by those running the scheme.<ref>{{Cite news|url=https://www.seattletimes.com/seattle-news/couple-acquitted-of-tax-fraud/|title=Couple acquitted of tax fraud|date=2008-01-04|work=The Seattle Times|access-date=2017-11-16|language=en-US}}</ref>
In 2004, the law licenses of two former IRS lawyers were suspended after a federal court ruled that they defrauded the courts so the IRS could win a sum in tax shelter cases.<ref>{{Cite news|url=https://www.nytimes.com/2004/08/21/business/2-ex-irs-lawyers-licenses-suspended-for-misconduct.html|title=2 Ex-I.R.S. Lawyers' Licenses Suspended for Misconduct|last=Johnston|first=David Cay|date=2004-08-21|work=The New York Times|access-date=2017-11-16|language=en-US|issn=0362-4331}}</ref>
In 2013, the Internal Revenue Service became embroiled in a [[IRS targeting controversy|political scandal]] in which it was discovered that the agency subjected [[Conservatism in the United States|conservative]] or conservative-sounding groups filing for tax-exempt status to extra scrutiny,<ref name="washingtonpost1">{{cite news|url=https://www.washingtonpost.com/politics/obama-denounces-reported-irs-targeting-of-conservative-groups/2013/05/13/a0185644-bbdf-11e2-97d4-a479289a31f9_print.html |title=IRS officials in Washington were involved in targeting of conservative groups |newspaper=The Washington Post |access-date=May 15, 2013}}</ref> though liberal groups were also targeted.<ref>{{cite news |url=https://www.nytimes.com/2017/10/26/us/politics/irs-tea-party-lawsuit-settlement.html |title=Justice Department Settles With Tea Party Groups After I.R.S. Scrutiny |last=Cochrane |first=Emily |date=October 26, 2017 |work=The New York Times |access-date=June 1, 2023}}</ref>
On September 5, 2014, 16 months after the scandal first erupted, a Senate Subcommittee released a report that confirmed that Internal Revenue Service used inappropriate criteria to target Tea Party groups, but found no evidence of political bias.<ref>{{cite web|last1=Korte|first1=Gregory|title=Senate subcommittee: No political bias in IRS targeting|website=[[USA Today]]|url=https://www.usatoday.com/story/news/politics/2014/09/05/senate-subcommittee-report-on-irs-tea-party-targeting/15130715/|access-date=September 10, 2014}}</ref> The chairman of the Senate Permanent Subcommittee on Investigations confirmed that while the actions were "inappropriate, intrusive, and burdensome", the Democrats have often experienced similar treatment.<ref>{{cite web|last1=The Permanent Subcommittee On Investigations|title=RS and TIGTA Management Failures Related to 501(c)(4) Applicants Engaged in Campaign Activity|url=https://www.documentcloud.org/documents/1283995-report-irs-amp-tigta-mgmt-failures-related-to.html|access-date=September 10, 2014}}</ref> Republicans noted that 83% of the groups being held up by the IRS were right-leaning; and the Subcommittee Minority staff, which did not join the Majority staff report, filed a dissenting report entitled, "IRS Targeting Tea Party Groups".<ref>{{cite web|last1=The Subcommittee Minority|title=IRS Targeting Tea Party Groups|url=http://www.mccain.senate.gov/public/_cache/files/8dd561cf-d44b-469d-9657-ddf428778cf5/psi-report---irs-tigta-mgmt-failures-related-to-501-c-4---minority-dissenting-views.pdf|access-date=September 10, 2014}}</ref>
On May 25, 2015, the agency announced that over several months criminals had accessed the private tax information of more than 100,000 taxpayers and stolen about $50{{spaces}}million in fraudulent returns.<ref>{{cite web|first1=Kaveh|last1=Waddell|access-date=2020-11-22|title=The IRS Hack Was Twice as Bad as We Thought|url=https://www.theatlantic.com/technology/archive/2016/02/the-irs-hack-was-twice-as-bad-as-we-thought/471255/|date=26 February 2016|website=The Atlantic}}</ref> By providing Social Security numbers and other information obtained from prior computer crimes, the criminals were able to use the IRS's online "Get Transcript" function to have the IRS provide them with the tax returns and other private information of American tax filers.<ref>{{cite news|last1=Steinberg|first1=Joseph |title=IRS Leaked Over 100,000 Taxpayers' Private Info To Criminals: What You Need |url=https://www.forbes.com/sites/josephsteinberg/2015/05/26/irs-leaked-over-100000-taxpayers-info-to-criminals-what-you-need-to-know/|access-date=May 27, 2015|work=[[Forbes]]}}</ref> On August 17, 2015, IRS disclosed that the breach had compromised an additional 220,000 taxpayer records.<ref>{{cite news|last=Weise |first=Elizabeth |title=IRS hack far larger than first thought |url=https://www.usatoday.com/story/tech/2015/08/17/irs-hack-get-transcript/31864171/ |publisher=USA Today |access-date=August 17, 2015 |date=August 17, 2015 }}</ref> On February 27, 2016, the IRS disclosed that more than 700,000 Social Security numbers and other sensitive information had been stolen.<ref>{{cite news |title=Massive IRS data breach much bigger than first thought |url=http://www.cbsnews.com/news/irs-identity-theft-online-hackers-social-security-number-get-transcript/ |publisher=[[CBS News]] |access-date=April 18, 2016 |date=April 18, 2016 }}</ref><ref>{{cite news|access-date=2020-11-22|title=Hack Brief: Last Year's IRS Hack Was Way Worse Than We Realized|url=https://www.wired.com/2016/02/irs-hack-700000-accounts/|newspaper=Wired|issn=1059-1028 }}</ref><ref>{{cite web|first1=Kevin|last1=McCoy|access-date=2020-11-22|title=Cyber hack got access to over 700,000 IRS accounts|url=https://www.usatoday.com/story/money/2016/02/26/cyber-hack-gained-access-more-than-700000-irs-accounts/80992822/|website=USA TODAY}}</ref>
The Internal Revenue Service has been the subject of frequent criticism by many elected officials and candidates for political office, including some who have called to abolish the IRS. Among them were [[Ted Cruz]], [[Rand Paul]], [[Ben Carson]], [[Mike Huckabee]], and [[Richard Lugar]].<ref>{{cite news|title=A world with no IRS? Really |publisher=[[CNN Money]] |url=https://money.cnn.com/2015/11/04/pf/taxes/abolish-the-irs/|access-date=February 11, 2020 |date=November 4, 2015 }}</ref> In 1998, a Republican congressman introduced a bill to repeal the Internal Revenue Code by 2002.<ref>{{cite web|title=How the IRS Was Gutted |url=https://www.propublica.org/article/how-the-irs-was-gutted |publisher=[[ProPublica]] |access-date=February 11, 2020 |date=December 11, 2018 }}</ref> In 2016, The [[Republican Study Committee]], which counts over two-thirds of House of Representatives Republicans as its members, called for "the complete elimination of the IRS", and Republican Representative [[Rob Woodall]] of Georgia has introduced a bill every year since he entered Congress in 2011 to eliminate income taxes and abolish the IRS. As of 2016, support for Woodall's bill has grown to 73 co-sponsors.<ref>{{cite news|title=Conservatives in Congress urge shutdown of IRS |publisher=Reuters |url=https://www.reuters.com/article/us-usa-taxes-congress/conservatives-in-congress-urge-shutdown-of-irs-idUSKCN0XT0TF |access-date=February 11, 2020 |date=May 2, 2016}}</ref>
In 2022, Representative [[Matt Gaetz]] of Florida introduced a bill to disarm the IRS after the agency had drawn public attention for a $700,000 purchase of ammunition.<ref>{{Cite web |last=Jones |first=Kelly |date= July 18, 2022 |title=Yes, the Internal Revenue Service did buy nearly $700K in ammunition in early 2022 |url=https://www.cbs8.com/article/news/verify/government-verify/internal-revenue-service-did-buy-nearly-700k-in-ammunition/536-0ce9f538-a372-4c26-8013-1ab4e571578c |access-date=August 4, 2022 |website=cbs8.com |language=en-US}}</ref><ref>{{Cite web |last=Gaetz |first=Matt |date=2022-07-01 |title=Text - H.R.8268 - 117th Congress (2021-2022): Disarm the IRS Act |url=http://www.congress.gov/ |access-date=2022-08-04 |website=www.congress.gov}}</ref>
The IRS has been criticized for its reliance on [[legacy software]]. Systems such as the [[Individual Master File]] are more than 50 years old and have been identified by the [[Government Accountability Office]] as "facing significant risks due to their reliance on legacy programming languages, outdated hardware, and a shortage of human resources with critical skills".<ref>{{cite report|author=United States Government Accountability Office|author-link= United States Government Accountability Office|date=28 June 2018|title=IRS Needs to Take Additional Actions to Address Significant Risks to Tax Processing|url=https://www.gao.gov/products/GAO-18-298|id=GAO-18-298}}</ref>
In May 2024, the Senate Finance Committee takes a closer look at whether the IRS failed to control a tax break offered by the Puerto Rico government, known as ''Act 22'' to attract the wealthy in Puerto Rico.<ref>{{Cite web |last=Cioffi |first=Chris |date=2024-05-28 |title=IRS Policing of Puerto Rico Perk for Rich Eyed in Senate Probe |url=https://news.bloomberglaw.com/daily-tax-report/irs-policing-of-puerto-rico-perk-for-rich-eyed-in-senate-probe |access-date=2024-05-28 |website=www.bloomberglaw.com}}</ref>


==See also==
==See also==
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