History Of The Irs
The IRS has a dramatic history full of strife
, intrigue, manipulation, finances, and corruption. When delved into, the IRS has a very interesting background and fascinating stories.
The post-colonial tax system faced major conflicts around the time of the civil war when there was conflict between the Northern city-based states and Southern farm-based states. George S. Boutwell was the first Commissioner of Internal Revenue during the presidency of President Abraham Lincoln.
To help regulate internal taxes, President Lincoln created the office of Commissioner of Internal Revenue in 1862. He also created the income tax to help pay for the war.
This position as the Commissioner of Internal Revenue is now a part of the Internal Revenue Service. The Revenue Act of 1862 was intended to be a temporary war-time tax.
Over 10% of the Union households paid the income tax before the end of the war. Over 21% of the North's income for the war came from these taxes.
Following the Civil War, reconstruction war based constructions for peace and more railroads for public transportation also needed funding. Despite this, lawmakers let the income tax expire as previously defined.
In 1873, the long depression erupted. Income taxes continued to evolved, but in 1894 the Supreme Court ruled that the tax was unconstitutional.
The US federal government was left wondering what to do to raise enough money. They tried several different things.
However, it was not until President Theodore Roosevelt was elected in 1906 that the public began to see tax reform take place. Shortly after this in 1913, the sixteenth amendment was ratified allowing Congress to create a direct income tax on the United States citizens.
Of 48 states total states at the time, only 42 ratified. Connecticut, Rhode Island, and Utah all rejected the amendment.
Pennsylvania, Virginia, and Florida did not bother to debate about the issue. Following this ratification, the first IRS 1040 form was printed, but not taxes were collected.
By 1918, the Bureau of Internal Revenue began using the name of "Internal Revenue Service" on tax forms. In 1953, they officially changed their name to the Internal Revenue Service.
The IRS simply asked people to fill out the form and turn it in, whereupon the forms were check for errors. The amount of work the IRS had to complete increased dramatically which required the organization to restructure its organization and policies.
Professional tax collectors replaced the tradition of "patronage" appointments to get help on taxes. In addition, the IRS doubled their employees, but they were still majorly behind on processing tax forms.
It was reported that they were processing 1917 tax forms in 1919. The leaders of the IRS, the IRS Commissioner and Chief Counsel, are politicians selected by the President and approved by the United States Senate.
Throughout the years the IRS has continued to evolve and adapt to growing populations and changing circumstances and taxes.
During Nixon's presidency, reporter Jack White from the Providence Journal published Nixon's tax return numbers. This leak showed that Nixon, who earns a $200,000 salary, only had to pay about $800 in income tax.
Reporter Jack White won the Pulitzer Prize for the leak and he instigated a lot of controversial talk on the matter. There was so much controversy, that many of the following presidents released their own tax returns.
This is one of many instances where Americans think of when Nixon said, "Well, I'm not a crook. I've earned everything I've got." As technology developed the IRS began to use microfilm and computers.
By 1990 the IRS was using the Internet to allow people to file their taxes online. IN 2003, the IRS promised they would not produce online filing software if software vendors would offer free e-filing to most Americans.
Six years later, 70% of filers are qualified to file online. Sixty-six percent or 98 million tax returns are expected to be filed online this year.
by: Jack Landry
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