How Was The IRS Formed?

Believe it or not, the roots of the IRS go all the way back to the years of the Civil War. In the year 1862 President Lincoln and The United States Congress created a new government position.

It was called “Commissioner or Internal Revenue”. The position was created in mainly in order establish and enforce an income tax to fund the war itself.

A decade down the road, this income tax was repealed. Although Congress re-established the income tax in the 1890′s, the Supreme Court quickly declared it unconstitutional.

However, the 16th amendment, which was ratified in 1913, gave Congress the power to create and enforce an income tax once again. This is the year in which the first 1040 was printed.

For anyone who made between $3,000 and $500,000 . . . the applied tax rate was 1%. Anybody who made more than $500,000 was taxed about 7%.

(A copy of the 16th amendment can be seen to the right.)

A Little About The IRS

The Internal Revenue Service or IRS as it is more commonly known is a branch of the United States Department of Treasury. They are ironically one of the most efficient tax agencies in the world. In 2004 alone, the IRS collected over $2 trillion in revenue. Over an astonishing 224 million tax returns were received and processed in the same year.

The Internal Revenue Service wants to help Americans understand and fulfill their duties as tax payers. While the IRS helps us to comply with tax laws, we can actually look to congress to create them. The IRS just helps us complete with these important laws and tries to establish equality in justice among tax payers.