Internal Revenue Service history

By January 1863 the office had grown to employ nearly 4,000 people, most of whom worked in the field as revenue collectors or property assessors.

The Revenue Act of June 30, 1864, authorized the Commissioner of Internal Revenue to compromise all suits “relating to internal revenue,” to abate outstanding assessments and to refund taxes subject to current regulations.

When the Civil War ended in 1865, the government's need for revenue was greatly reduced.

The March 1, 1867 Revenue Act authorized the Secretary of the Treasury to adopt, procure and prescribe these and other weighing and gauging instruments to prevent and detect fraud by spirit distillers.

On April 5, 1870, IRS Commissioner Delano forbade tax assessors from furnishing lists of taxpayers for publication.

After many attempts Congress finally passed a modest income tax in 1894.

On February 25, 1913, the 16th Amendment officially became part of the Constitution, granting Congress constitutional authority to levy taxes on corporate and individual income.

On January 5, 1914, the Treasury Department unveiled the four-page form (including instructions) for the new income tax.

In 1917, the Internal Revenue Bureau launched a special nationwide public education program to help citizens understand the new tax burden.

In 1919, the Treasury Secretary asked the IRS Commissioner to form a criminal investigation unit to go after tax cheats and other criminals.

On June 1, 1930, the main section of the new Internal Revenue building opened, 16 months ahead of schedule and with a total construction cost of just over $6 million.

In 1931, an IRS Intelligence Unit investigation led to his indictment on federal income tax evasion and violations of the Volstead Act.

On August 14, 1935, Franklin D. Roosevelt signed the Social Security Act.

The 1942 Revenue Act sharply increased most existing taxes, introduced the Victory tax (a 5 percent surcharge on all net income over $624 with a postwar credit), lowered exemptions and began provisions for medical and dental expenses and investors’ expense deductions.

Beginning in 1945 Congress and the Treasury Department began efforts to overhaul the whole tax collection system.

In 1948, the Bureau introduced punch-card equipment to process notices.

In 1949, the IRS introduced electric typewriters, continuous forms, dual-roller platens and posting machines to more efficiently process income tax returns.

By 1950, the Bureau introduced computers for tabulation.

The IRS was created in 1952, though it was preceded by various other United States tax-collecting offices.

The agency officially became the Internal Revenue Service on July 9, 1953.

According to Section 501(c)(3) of the United States Internal Revenue Code (IRC) of 1954, “Corporations…organized and operated exclusively for religious, charitable…or educational purposes” are entitled to tax exemption.

In 1959, Congress and the Secretary of the Treasury approved IRS plans to install a nationwide automatic data processing system.

On May 1, 1961, President John F. Kennedy attended the Joint Conference of Regional Commissioners and District Directors of the IRS. The only United States president to visit IRS headquarters, President Kennedy praised the Service for pursuing fair taxation in the promotion of national interest.

In 1962, James Tingle invented the table while working in an IRS Service Center.

"Washington Reviewing the Western Army at Fort Cumberland, Maryland" | Frederick Kemmelmeyer | circa 1795 | Metropolitan Museum of Art | Gift of Edgar William and Bernice Chrysler Garbisch, 1963

The toll-free telephone network system, piloted in 1966, eventually allowed the IRS to handle most taxpayer inquiries by phone.

On January 1, 1967, the IRS launched a nationwide, automated federal tax system.

In 1970 Bob Jones University was a nonprofit religious and educational institution serving 5,000 students from kindergarten through graduate school.

University benefactors and administrators maintained that the Bible forbade interracial dating and marriage, and African Americans were denied admission based solely on their race prior to 1971.

In 1972, the IRS began to offer tax information in Spanish.

Following the Fourth Circuit Court of Appeal’s 1975 decision in McCrary v.

In 1978 the IRS installed a Remittance Processing System (RPS) and mail sorting system in all service centers.

In 1986, the IRS established an artificial intelligence laboratory as part of an initiative to explore potential applications of new technologies to tax processing.

In an attempt to protect taxpayers' rights, Congress in 1988 passed the TAXPAYER BILL OF RIGHTS (Pub.

The National Technical Information Service (NTIS) established FedWorld in 1992 to serve as the online locator service for an extensive inventory of information distributed by the federal government.

Two years later in 1994, NTIS launched a bulletin board system to support the IRS, giving the Service the ability to provide forms and publications online.

More recent technological applications have changed the way taxpayers interact with the IRS. In 1995, for example, more than 14 million individuals and businesses used the IRS electronic filing program to submit their tax returns.

In September 1997, over three days of televised hearings, the United States Senate Finance Committee heard a litany of horror stories: taxpayers gave accounts of ruined lives, and IRS agents described a culture of lawlessness that included forgeries, spying, shakedowns, and cover-ups.

In 1998, Congress passed the Internal Revenue Service Restructuring and Reform Act of 1998 (IRSRRA), Pub.

By March 1999, property seizures were down 98 percent from levels two years prior; GARNISHMENT of paychecks and bank accounts were down 75 percent; and liens, which ensure that a tax is paid when property is sold, were down 66 percent.

In 2000 Bob Jones University acknowledged that it had been wrong in not admitting African American students and lifted its ban on interracial dating.

28 (2001), the United States TAX COURT held that the testimony of the taxpayer and a document from a small-claims courts showing damages to a piece of property, which he alleged entitled him to a deduction, did not constitute credible evidence to shift the burden of proof to the IRS.

2002 – IRS launched the Electronic Installment Agreement application.

2003 – Free File (served almost 3 million taxpayers its first year)

In January 2011, the IRS launched its first native mobile application, IRS2Go.

2013 – Direct Pay: The IRS worked with the Bureau of the Fiscal Service to launch the first online method for federal tax payments that allows users to quickly pay without pre-registration

In 2014, Commissioner John Koskinen and Taxpayer Advocate Nina E. Olson released an enhanced Taxpayer Bill of Rights.

In November 2016, the IRS launched Online Account, a self-service application that allows taxpayers to check the amount they owe, see their payment history in the last two years, view a snapshot of their most recently filed tax return and link to payment options or full transcripts.

In August 2017, the IRS.gov team launched a major refresh of the web site.

The site grew and evolved into IRS.gov, which had more than 609 million visits in 2018.