From the Internal Revenue Manual: Provide America's taxpayers top quality service by helping them understand and meet their tax responsibilities and by applying the tax law with integrity and fairness to all.

Best known by its initials of I.R.S., the Internal Revenue Service is the agency of the United States federal government responsible for the calculation and collection of federal taxes. It operates as a division of the Treasury Department. The IRS is the most recent incarnation of the federal government's arms, branches, and tentacles that have been dipping into the pockets of U.S. residents almost since the country was founded.


Federal taxation in the US finds its beginnings in the Office of the Commissioner of the Revenue first established in 1791 and existing in more or less its present form since 1862. A bit on the history of federal taxes in the U.S. provides some background information.

The Federal Government began levying internal taxes for revenue purposes with a tax on distilled spirits as of 1791-03-03 Next to be taxed, in 1794 were carriages, liquor retailers, auctioned property, refined sugar and snuff; by 1798 the list included snuff mills, legal instruments, bonds, deeds and real estate. On 1792-05-08 the position of Commissioner of the Revenue was created to take over supervision of tax collection from state agencies. Tax collection by the federal government was first authorised 1798-07-04. This lasted until 1802-04-06 when all federal taxes were repealed.

The office of Commissioner, assisted by district collectors and assessors, was revived on 1813-07-24 to collect taxes to finance the War of 1812. This taxation was once again dropped at the end of 1817. After that date the United States remained tax-free on the federal level until 1861. It wouldn't last.

With an act of 1861-08-05, all the old jobs were recreated and for the first time a federal income tax and property tax was imposed to pay for the civil war. This did not last long. The Tax Act of 1862-07-01 laid the foundation for the modern taxation system used to date, taxing not only income but also a wide variety of commodities. The Office of the Commissioner of Internal Revenue became informally known as the Bureau of Internal Revenue. In 1883, all taxes but those on tobacco and alcohol were once again repealed.

Subsequent attempts to reimpose an income tax amounted to nothing and in 1895 the Supreme Court deemed the income tax, as introduced in 1894, unconstitutional. Non-revenue taxes were imposed on a number of items and a temporary war time tax was levied from 1898-1901. Since the problem with the income tax was a constitutional one and the growing federal government couldn't exist on thin air, the best way to mend that was to change the constitution. The 16th amendment to the constitution of the United States authorised federal income tax and that tax was put into law as of 1913-10-13.

In 1953 the Office of the Commissioner of Internal Revenue was redesignated the Internal Revenue Service with an act of the Treasury Department. It handles all matters related to federal taxation except those assigned to the Bureau of Alcohol, Tobacco and Firearms.


The IRS is headed by a commissioner, appointed by the Secretary of the Treasury, who is assisted by two deputy commissioners, one of whom is in charge of operations and the other of whom supervises modernisation. Only the Chief Communications and Liaison Officer, the Chief Information Officer and the National Taxpayers Advocate answer directly to the commissioner. The Chief Counsel also reports only to the commissioner, with exceptions for subjects of reform and restructuring. All other positions report to the deputy commissioner for operations, including the Chief Financial Officer, the Chief Operations Officer and all regional commissioners. Headquarters are located in Washington, D.C..

The four (formerly seven) regional offices are headed by a Regional Commissioner who supervises a Regional Controller, a Regional Chief Compliance Officer, a Regional Chief of Customer Service, a Director of Support Services and a Regional Director, Equal Employment Opportunity and Diversity (there's a long title for you). Each region contains a number of districts with a similar hierarchy.

Following the restructuring of the IRS in 1999, the four IRS regions are:

  • Midstates: ND SD MN WI IL IA NE KS MO AR OK TX

Regions and districts are backed up by Service Centers which is what the taxpayer usually sees when dealing with the IRS. These can be data processing farms or local offices. These are the divisions that interface directly with the taxpayer, conduct audits and personify the IRS that everyone loves to hate.

What does the IRS do with all that dosh?

Once the taxes have been collected, the IRS records what's been collected and what is due either way and has nothing to do with the money itself. Money collected by the IRS comes under the loving care of the Treasury Department which apportions the proceeds to all arms, branches, and tentacles of the government according to the budget created by the administration and approved by Congress or (at least in these days where there's a surplus) uses part of it to pay off the national debt while keeping a bit in reserve for emergencies and future use, unless it's all eaten up by tax cuts.

National Archives and Records Administration

The Internal Revenue Service is, to most people, a large, megalithic evil government agency that exists to take your money away. In reality, all the IRS does is collect the money that is, by law (read, passed into law by Congress and the President), owed to the government. They are not a group of nasty guys, they simply do their job. If you do not try to scam, trick, or fool the IRS by hiding or laundering large amounts of cash, they are actually a very friendly bunch. You can call them on the phone to ask them as many questions as you want about certain tax forms, they will gladly explain what you can and can't do under certain rules. They will even mail back to you forms and circle the empty blanks you forgot to fill in with a highlighter for you. Give them what's theirs, and they will bend over backward to help you do it.

Family friend John Grindley briefly worked as a temporary employee for the IRS back in 1980. Here's how the IRS handled things in the days of paper files and typewriters:

I worked a week at the IRS as a trainee. To be hired on permanently, we had to transcribe thirty-six 1040 forms in one hour -- and we had all day to "pass" the test. Or in my case, all night; I opted for the night shift because the pay was marginally higher: $3.90 an hour.

I think I managed to transcribe 9 forms in the first hour; by the end of the night I was up to 32 per hour, which wasn't enough to get hired.

I gratefully walked out -- the office was like something out of Kafka.

As a point of comparison, John soon got a job at McDonald's as a hamburger cook earning $4.10 per hour, plus free lunch. John described the fast-food job as being preferable to working for the IRS in every way imaginable.

So, it's no surprise that IRS employees had a reputation for being unhelpful and grumpy at best (and viciously vindictive at worst) considering they had a grindingly huge workload and made less than your average fry cook.

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