Spotlight: IRS

IRS LogoAs procrastinating Americans prepare to file their 2012 federal tax returns by midnight tonight (April 15), we thought this would be a good time to take a look at the agency to which they’ll be sent: the Internal Revenue Service (IRS). The IRS’s mission is to “provide America’s taxpayers top quality service by helping them understand and meet their tax responsibilities and enforce the law with integrity and fairness to all.” Its commissioner and chief counsel are appointed by the president and confirmed by the Senate. In FY 2012, it collected more than $2.5 trillion in revenue, processed more than 237 million tax returns and paid about $373 billion in refunds. For each $100 it collected, it spent just 48 cents.

A bureau of the Department of the Treasury, the IRS’s roots go back to 1862, when President Lincoln and Congress created the position of Commissioner of Internal Revenue and enacted an income tax to pay war expenses. That tax was repealed ten years later, revived by Congress in 1894, and ruled unconstitutional by the Supreme Court in 1895. It wasn’t until 1913, with the adoption of the 16th Amendment, that Congress regained the authority to enact a federal income tax. The IRS’s precursor, the Bureau of Internal Revenue, was created by section 7801 of the Internal Revenue Code, which gives the secretary of the Treasury the power to create an agency to enforce the internal revenue laws. The agency took its current name in 1953, as part of a reorganization that replaced a patronage system with career employees. The IRS Restructuring and Reform Act of 1998 divided the IRS into three commissioner-level organizations: the Commissioner’s Office, Services and Enforcement (which oversees the agency’s four primary operating divisions), and Operations Support.

IRS headquarters are located at 1111 Constitution Ave., N.W., in Washington, D.C. The agency employs more than 100,000 people, who work at its headquarters as well as in more than 650 offices in all 50 states and U.S. territories (and in some U.S. embassies and consulates). These include ten regional service centers (in Andover, Mass.; Atlanta; Austin, Texas; Cincinnati; Fresno, Calif.; Holtsville, N.Y.; Kansas City, Kan.; Memphis; Ogden, Utah; and Philadelphia) and numerous taxpayer assistance centers. To manage its extensive data and information, the IRS operates three enterprise computing centers, in Detroit; Martinsburg, W. Va.; and Memphis.

President Obama’s FY 2013 budget request for the IRS was just under $12.8 billion, roughly $950 million above the 2012 enacted level.