Agency Spotlight–The Internal Revenue Service (IRS)

Feb 3, 2017

IRS

irs

Tax Season is upon us, so this month our agency spotlight will be on the Internal Revenue Service (IRS).

The IRS is a bureau under the Department of the Treasury and is the revenue service for the federal government. It’s one of the world’s most efficient tax administrators. In fact, they spent only 35 cents for each $100 it collected in FY2015! That same year, the IRS collected almost $3.3 trillion in revenue and processed nearly 240 million tax returns.

Mission

Their mission is to provide America’s taxpayers the highest quality service by helping them understand and meet their tax responsibilities and enforce the law with integrity and fairness to all. Taxpayers are expected to comply with the tax laws passed by Congress and the IRS is to help compliant taxpayers while ensuring that the minority who are unwilling to comply pay their fair share.

The IRS Authority

The IRS is organized to carry our responsibilities of the Secretary of the Treasury under section 7801 of the Internal Revenue Code. The secretary now has full authority to administer and enforce these laws and also has the authority to create an agency to enforce these laws. The IRS was created based on this legislative grant.

Section 7803 provides for the appointment of a commissioner of the Internal Revenue Service to administer and supervise the execution and application of internal revenue laws.

IRS History

The history of the IRS dates to the Civil War when President Lincoln, and Congress, in 1862, created the position of commissioner of Internal Revenue. They enacted an income tax to pay war expenses. This income tax was repealed 10 years later. In 1894, congress revived the income tax law, but the Supreme Court ruled it unconstitutional the following year.

In 1913, Wyoming ratified the 16th Amendment providing the ¾ majority of states necessary to amend the Constitution. This also gave Congress the authority to enact an income tax again. During World War I the top rate of income tax rose to 77 percent to help finance the war. This rate dropped dramatically in the post-war years; down to 24 percent in 1929 and then rose again during the depression.

Congress introduced payroll withholding and quarterly tax payments during World War II. In the 1950’s, the agency was reorganized to replace a patronage* system with career, professional employees. *A patronage system is a practice in which a political party, after winning an election, gives government civil service jobs to its supporters, friends, and relatives as a reward for working toward victory, and as an incentive to keep working for the party. The Bureau of Internal revenue became the Internal Revenue Service.

The IRS Restructuring and Reform Act of 1998 prompted a huge reorganization and modernization. They reorganized to closely resemble the private sector model of organizing around customers with similar needs.

The IRS Commitment to Diversity, Equity, and Inclusion

The IRS ranked 4th on CAREERS and the disABLED magazine’s 2016 list of top government employers. The IRS Deputy Commissioner for Services and Enforcement said, “We’re in the business of serving taxpayers. We can’t serve them well without understanding who they are. Our processes and interactions must meet their needs. Therefore, taking advantage of the diversity of our workforce drives us toward better solutions and service for our customers.”

They have a strong commitment to ensuring equity, diversity, and inclusion are integrated into the policies, procedures, and practices used to carry out their mission.

Equity

This is about ensuring fairness and respect. It means that employees feel supported, valued, trusted and able to achieve their personal best. Equity encompasses legal obligations and requirements for non-discrimination, civil rights, reasonable accommodation, and equal employment opportunities.

Diversity

This is a broad concept that encompasses all the differences in employees. It includes focus on race and gender, but also the diversity of thought, ideas, backgrounds, and experiences.

Inclusion

Inclusion is one of their core values. It is the leveraging and engagement of every employees’ unique strengths and talents so that everyone can contribute to their full potential.

Diversity and Inclusion

Both diversity and inclusion, together, is a long-term business strategy that will help fuel and innovate continual improvement necessary for future success.

Administrative Functions

The IRS publishes tax forms that taxpayers must choose from for filing their taxes. Along with these tax forms, they also publish several forms for their own internal operations, used for the initial processing of income tax returns. In addition to the collection of revenue and pursuing tax cheaters, the IRS issues administrative rulings like revenue rulings (public administrative rulings that apply the law to factual situations) and private letter mailings (written decisions in response to taxpayer requests for guidance).

Subsequent posts this month will look at injuries or illnesses IRS workers face, a more detailed history, and more information about certain divisions of the IRS. Stay tuned here!

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