Taxes are mandatory payments made to the federal government via the IRS. However, not all 144 million taxpayers in the U.S. know what the IRS is. They know that they are to file and pay their taxes via this body, and it ends there, sadly. Come to think of it, wouldn’t it be nice to have a good knowledge of who you pay your taxes through? Wouldn’t it be nice to know who the IRS is?
The Internal Revenue Service (IRS) is a United States Government agency in charge of collecting taxes and imposing tax laws. This agency came into existence in the year 1862, and it functions under the authority of the United States Department of Treasury.
The IRS is a household name in the U.S. In fact; its popularity has earned it nicknames like The Taxman and Uncle Sam. In the same vein, its stringent penalties have also made this agency one of the most dreaded agencies in the U.S. Want to know more about this agency? Journey with me as I provide you with comprehensive information about the IRS.
What is the IRS (Internal Revenue Service)?
Each tax year, several million taxpayers scramble to either file their taxes, make a payment, request for an extension, or contact the IRS for one reason or another. Each year this agency is always busy ensuring that taxpayers perform their duty. The IRS, in its grandeur, has detailed information about taxpayers. However, only a few percent of taxpayers actually have significant information about the IRS. In fact, some taxpayers don’t care to know what the IRS is, probably because the name sends shivers down their spine.
The IRS has one primary duty: collect taxes (individual and employment taxes), and ensure that all taxpayers pay their taxes accordingly. Trust me; the IRS will fight tooth and nail to ensure that your taxes are paid. In situations where taxpayers decide to act contrary to the IRS rules, there are always penalties to forestall future occurrence.
Aside from the typical individual and employment taxes, the IRS also takes charge of corporate, gift, excise, and estate taxes, including mutual funds and dividends. Thanks to modern computer technology, individuals and corporation can now file their returns electronically via software programs, including secure internet connection. In as much as the IRS approves the e-filing method, it doesn’t recommend any certain platform or filing software.
Collections and Refunds, by Type of Tax:
How Does the IRS Work?
The internal revenue service remains one of the most significant agencies in the United States. For an agency that generates a huge percentage of the U.S revenue, and process millions of tax returns each year, this shouldn’t come as a surprise. It is pertinent that all taxpayers know what this agency is, including how they operate. Doing so may seem unimportant to you now, but you’ll see the importance at some point.
The IRS, as it is commonly called, is the United States agency in charge of collecting taxes and enforcing tax laws. This agency has four main divisions: Wage and investment, Large Business and international, Small Business / Self-Employed, including Tax-Exempt and Government Entities. The duty of the IRS is to provide the American taxpayers with topnotch service by helping them recognize and adhere to their tax duties and by enforcing the tax law with honesty and equity.
Some people believe that tax laws are created and enforced by the IRS. However, such claims are false. The IRS doesn’t create tax laws; that is the duty of the Congress. The IRS did not create laws like the 10-year IRS statute of limitations for unpaid tax debt. It is the duty of the IRS to ensure that taxpayers comply with the laws. This is the agency that would trouble you for your taxes each year.
What Year Did the IRS Begin?
The IRS didn’t just drop from the moon and start collecting and enforcing tax laws. Just like everything on earth, the IRS has an origin. It started from somewhere and has been on the march ever since. If your child out of curiosity asks you, when did the IRS start? What would be your reply? When did this agency start?
The IRS was created in the year 1862 by the then United States President Abraham Lincoln. In that year, IRS was mainly established to provide revenue to fund the cost of waging war. However, the war ended 7 years later, and the scheme was brought to a halt. Fast forward to the year 1913; the 16th amendment was ratified, establishing the tax for good.
Taxes are vital to the development of a country. For the fiscal year 2019, the U.S made a tax revenue of $3.46 trillion! Imagine the U.S. didn’t re-establish taxes in the year 1913. Do you think the U.S. will be regarded as one of the formidable and developed countries in the World? I doubt!
Filing Season Statistics for Week Ending July 17, 2020:
|Individual Income Tax Returns:||2019||2020||% Change|
|Total Returns Received||145,941,000||151,782,000||4.0|
|Total Returns Processed||145,191,000||145,464,000||0.2|
|Visits to IRS.gov||522,468,000||1,380,722,000||164.3|
|Direct Deposit Refunds:|
|Amount||$258.374 Billion||$240.463 Billion||-6.9|
What Is the Purpose of the IRS?
Taxes are as certain as death. You will definitely pay taxes at one point in your life. In fact, the IRS will be a name that sticks in your memory for a very long time. Thus, it is important you do your homework on this agency. Knowing the IRS and how it operates is one thing, while understanding its purpose is another (an essential aspect of the IRS, you need to figure out).
The Internal Revenue Agency helps interpret the tax laws of the United States. This agency collects taxes for the US Treasury and creates forms to determine how much tax is due. The IRS processes several tax returns each year, including individual taxpayer, C Corporations, S Corporations, Partnerships, Non-profits, Estates, etc.
Aside from offering tax assistance to taxpayers and ensuring that they abide by tax laws, it is also the duty of this agency to follow-up and resolves instances of inaccurate and fraudulent tax filings. The IRS also takes charge of several benefits schemes and impose parts of the Affordable Care Act. If you have questions regarding how far back you can get tax refunds or any tax-related queries, contact the IRS and ask.
Who Created the IRS?
Who created the IRS? Who created one of the most dreaded agencies in the United States? I bet you’ve sat down one day to ponder on that question. The IRS didn’t just come up one day. It was actually created by a man, one of the greatest individuals to have led the United States.
President Abraham Lincoln created the IRS in the year 1862. The main reason why one of the founding fathers of the United States created this agency was to provide revenue to fund war expenses. That was several decades ago. Now, tax proceeds gotten by the IRS are used to fund better things.
Since its creation, the agency has enjoyed its fair share of criticism and controversies. Several taxpayers loathe the name “IRS” while the anxious ones quiver when they hear the name. It’s not one of those names you want to hear when you record a substantial business profit. It’s definitely not the name you’ll like to hear when happy.
P.S. There are lots of tax misconceptions. One of those misconceptions is about the time one stops paying Medicare and social security taxes, so ensure you get your facts right before you believe anything.
Who Controls the IRS?
Just like all agencies in the United States, the IRS has a controller. That person who calls some of the shots. No, he isn’t a god. He is human like you and me! And he is regarded as the commissioner of the IRS.
Charles P. Rettig, who remains the 49th Commissioner of the IRS, is in charge of the agency. As commissioner of the IRS, Charles P. Rettig is that individual who runs the affairs of the nation’s tax system, which gathers approx. $3.4 trillion in tax revenue annually. Mr. Rettig chairs an agency of approximately 80,000 employees and a budget of around $11 billion.
Having known who calls the shot at the IRS, I guess you may now want to narrow down your anger a bit. However, before you start loathing, it is important you note that most of what you enjoy wouldn’t have been possible without taxes. In addition, Mr. Rettig is only following orders from the U.S. Department of treasury and Congress.
Is the IRS Federal or Private
If you are an income earner in the United States and you’ve never heard of the IRS, then something is wrong. The IRS remains one of the prominent agencies in the U.S., and due to their prominence and the nature of their operations, you find people asking lots of questions about this agency. One of these questions is: “Is the IRS a private or a Federal Agency?”
The IRS is funded and owned by the American government; this makes it a Federal agency. The duty of this federal agency is to collect taxes that’ll be used to finance several government projects, programs, etc.
Remember, the IRS was founded or established by the United States government. This makes it a Federal agency. A private organization, on the other hand, is one that is established by an individual.
Where Does the IRS Money Go?
During the fiscal year 2019, the IRS racked up an excess of $3.5 trillion. That is a very huge sum of money. But, come to think of it, where does this money go to? I bet you have sat down to think about that. If you have, and you didn’t get a conclusive answer, I’ll provide you with some.
Your taxes received by the IRS doesn’t go into the IRS’s account. The money is deposited with the United States Treasury and, after that, utilized by the government.
Below are some things your hard-earned money is spent on:
- Health Programs
- Interest on national debt
- Veteran benefits
- Food and agricultural benefits
- Social security
Health, they say, is wealth. A portion of the taxes you pay is used to finance programs such as Medicaid, Medicare, children’s Health Insurance Program, including general health incentives. These programs put together make up around 28% of the previous year’s federal budget.
The taxes you pay help finance the national defence and security-related programs. It is also used to finance the Department of Defense and the cost of international military schemes.
Interest on national debt:
You shouldn’t be surprised that the United States Government isn’t so keen to pay off its debts. The national debt is a whopping $17 trillion, and the federal government depends on the taxes you pay to make interest payments on the borrowed cash. The interest payment of last year’s debt racked up about 6% of the federal budget.
The U.S. is home to about 22 million veterans. Your taxes are what caters for this enormous number of veteran. It takes care of their pensions, medical care, education programs, including disability payments. The federal government also finance the running of VA medical centers and clinic.
Food and agricultural benefits:
This aspect covers assistance programs such as the Supplemental Nutrition Assistance Program, the National School Lunch program, including Federal Crop Insurance.
Over 60 million Americans were beneficiaries of the Social Security benefits in 2016. Beneficiaries of this program are retried workers, surviving children, including the spouse of deceased workers, and incapacitated workers.
Who Is the Head of the IRS?
Have you ever wanted to meet with the head of the IRS to lay a complaint? Probably tell him or her of how badly the agency has treated you. Or ask him questions regarding the minimum income to file taxes? Do you even know who heads the IRS? If you don’t, you are about to find out.
The head of the IRS is Charles P.Rettig. Mr. Charles is the 49th Commissioner of the IRS. He was chosen to head the agency in the year 2019 by the United States President Donald Trump. Previously, Mr. Charles was working with the law firm of Hochman, Slkin, Rettig, Toscher and Perez, P.C., for over 36 years.
The head of the IRS has achieved a lot, which was probably why President Donald Trump selected him to head one of the most important agencies in the United States. Charles P. Rettig has gotten several awards during his remarkable career. His awards were presented to him by several organizations across the United States.
How Efficient Is the IRS?
An agency as crucial as the IRS is supposed to be quite efficient. However, that hasn’t been the case for the IRS. Several times, the efficiency of one of the most important agencies in the United States has been called into question. There are talks of how the great IRS has declined over the years.
The decision of Congress to slash the IRS budget has greatly affected its efficiency. A reduction in its budget means a reduction in the IRS workforce. With over 140 million taxpayers in the United States, the IRS will need the best support in terms of funding to be efficient in its duties. Inadequate funding has also made it difficult for the IRS to fish out tax invaders and avoiders, thus reducing its efficiency.
On cannot solely blame the IRS for their inefficiency. When a child misbehaves, a little portion of the blame should go to the parents. It’s the same for the IRS. If peradventure the Congress provided the IRS with enough funds to operate, they would be more efficient than they currently are. According to statistics, the United States lost about $318 billion in taxes between 2011 and 2013.
Is the IRS Above the Law?
The IRS always means business when it comes to collecting taxes and enforcing tax laws. If the IRS were to be a human, one would have likened the agency to a villain. It’s hard to find anyone who loves this agency wholeheartedly. Irrespective of your resentment towards the IRS, you must still pay your taxes. With the way the IRS enforces tax laws, it is very easy to believe that they are above the law. Are they?
Just like several other government agencies, the IRS is very adept at breaking the law frequently. The agency doesn’t adhere completely to the law; rather, they follow it when they can. They seize assets without following due process. Cases of illegal asset seizures have been on the rise.
Generally, no one is above the law. Not even those who created the law. However, due to the power the IRS wields, including the backing it gets, it’s safe to say that they have decided to see themselves as above the law. Sadly, the organizations ( the Congress and courts) who are In the right position to end the IRS abuse of power, always look sideways when issues regarding the agency are brought to them. This is because the U.S. tax code benefits certain kinds of people. In addition, not only do taxpayers find it difficult to understand the U.S. complicated tax laws, but many workers of the IRS are in the dark regarding how the code works.
Contact Numbers for the IRS:
Due to the complicated nature of the U.S. tax laws, you will definitely want to reach out to the IRS for one reason or another. Remember, it is impossible to figure out all the answers to those questions you may have. So you don’t end up making mistakes that could result in you losing your refund or being penalized, its best you reach out to the IRS when necessary. Here are some contact numbers for the IRS.
You can contact the IRS with general inquiries regarding taxes, your tax return, or an issue:
|The contact number to call for questions about personal income taxes is 1-800-829-1040 (7 a.m. to 7 p.m. local time).|
|The contact number to call for questions about personal income taxes is 1-800-829-1040 (7 a.m. to 7 p.m. local time).|
|For questions about business taxes, call 1-800-829-4933 (7 a.m. to7 p.m. local time).|
|If you believe that a fraudster has filed a tax using your name or security number, call the identity theft hotline with 1-800-908-4490.|
|For inquiries regarding excise taxes, call 866-699-4096 (8 a.m. to 3:30 p.m. Eastern Time).|
Feel free to contact the IRS if you have inquiries or issues. With the coronavirus pandemic still present, expect to wait for some time before you are connected to an IRS operative.