Difference between revisions of "Internal Revenue Service"

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*[[John Koskinen]]
 
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*[[IRS code, section 501]]
  
 
==External links==
 
==External links==

Revision as of 13:07, 3 July 2014

Internal Revenue Service
US-InternalRevenueService-Seal.svg
Commissioner:John Koskinen
Annual budget:$13.3 billion
Total employed:91,555
Year created:1862
Official website:Office website
The Internal Revenue Service (IRS) is an agency in the U.S. Department of the Treasury responsible for administering the United States tax code.[1] The current director is John Koskinen, who was confirmed by the Senate on December 20, 2013.[2]

The Internal Revenue Service employed 78,372 people both in the U.S. in 2012.[3]

History

The commissioner of Internal Revenue was formed by Abraham Lincoln in 1862 to collect the newly passed income tax intended to fund the Civil War. The income tax was repealed ten years later, but was revived in 1894. The Supreme Court then ruled the income tax unconstitutional in 1895. With the ratification of the 16th Amendment in 1913, the ability to collect income taxes was authorized.[4]
The first 1040 income tax form in 1913

The first income tax rates were 1% on incomes above $3,000 and a 6% surtax on incomes over $500,000. The rates and types of taxes changed depending on circumstances, reaching as high as 77% in the highest bracket during World War I. Payroll withholding tax and quarterly tax payments were implemented during World War II.[4] During Prohibition, the commissioner of Internal Revenue was charged with enforcing the ban on alcohol. In 1931, the IRS Intelligence Unit arrested noted gangster Al Capone on charges of tax evasion for which he was sentenced to 11 years in prison.[5]

In 1952, President Harry Truman reorganized the IRS to replace the patronage system with a career civil service system with the commissioner and chief counsel appointed by the president and confirmed by the United States Senate. President Eisenhower changed the name of the organization from the Bureau of Internal Revenue to the Internal Revenue Service in 1953. In 1954, the income tax filing date was changed from March 15 to April 15 of each year.[5]

The Tax Reform Act was passed during the Reagan administration, changing 300 provisions in the tax code. The IRS was reorganized in 1998 with the passage of the IRS Restructuring and Reform Act. The reorganization was completed in 2000 with the formation of four main divisions: Wage and Investment, Small Business/Self-Employed, Large and Mid-Size Business and Tax Exempt and Government Entities.[5]

Structure

Mission

The official mission statement of the IRS is as follows:

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.[6]

—IRS, [1]

Leadership

The current commissioner of the IRS is John Koskinen.

Note: Votes marked "N/A" represent voice votes or unrecorded votes.


Organizational chart

Irs org chart.jpg

Issues

IRS targeting

On May 10, 2013, news broke that various branches of the IRS had specifically targeted conservative groups' applications for tax-exempt status. It began during the tea party surge in 2010. The agency was separating tax-exempt applications by searching for political terms such as "tea party" and "patriot." In June 2011, an IRS official was briefed on these transgressions and asked that this practice end. The flagging continued, however, when the criteria was changed in January 2012 to look out for groups educating on the Constitution and the Bill of Rights.[7]

The targeting included allegations that tea party groups were forced to provide information not asked of other tax exempt groups. Examples of this were requests for donor information, Facebook posts, resumes and political intentions of group officials and connections to other groups.[8][9]

Testifying on May 15, U.S. Attorney General Eric Holder promised a criminal investigation spearheaded by the Federal Bureau of Investigation (FBI) and federal prosecutors into the Cincinnati office that has been blamed for the extra attention paid to conservative organizations, but he made it clear that the investigation would span more than just Cincinnati in order to find out where the "enforcement gaps" in the IRS's policies lie. Holder also added that groups paying for legal representation during the controversy would be reimbursed for legal costs.[10]

On May 16, IRS Commissioner Steven Miller announced his resignation. He still testified at the hearings the next day.[11] Lois Lerner, the head of the tax-exempt organizations division throughout the targeting scandal retired on September 23, 2013, when an IRS review board informed her she would be removed from her position due to "neglect of duties."[12]

In January 2014, the FBI announced no criminal charges would be filed over the IRS targeting scandal unless new evidence came to light.[13] On April 9, 2014, emails from Lerner, expressing her interest in denying the Crossroads GPS 501(c)(4) tax-exempt status, were released to the public, and a letter was sent by the House Ways and Means Committee urging prosecutors to hold Lerner accountable. Fourteen committee democrats voted against sending the letter with Rep. Sandy Levin stating the intention of the letter was to "declare this a scandal and keep it going until November."[14]

On May 7, 2014, the U.S. House voted to hold Lois Lerner in contempt of Congress due to her refusal to answer questions during her hearing. The criminal contempt charge carries a jail sentence and fine, but the Justice Department must first decide whether or not to pursue the charge. If the department opts not to pursue the charge, the House can bring up a civil suit demanding Lerner to testify or face time in jail. Lerner would not necessarily be forced to testify if the criminal charge is pursued.[15]

The House Oversight and Government Reform Committee received information from the Justice Department that the IRS provided the FBI with a 1.1 million page database of information on tax-exempt organizations. The files, announced by the committee on June 9, 2014, were to be used by the FBI to investigate the political activity of the tax-exempt organizations. In a letter to IRS Commissioner John Koskinen, Reps. Darrell Issa (R-CA) and Jim Jordan (R-OH) wrote, "We were extremely troubled by this new information, and by the fact that the IRS has withheld it from the committee for over a year. We were astonished to learn days ago from the Justice Department that these 21 disks contained confidential taxpayer information protected by federal law." The IRS claimed most of the information was publicly available with the exception of 33 organizations for which it accidentally released non-public information to the FBI. Republican representatives are looking into whether any wrongdoing occurred.[16]

The House Ways and Means Committee announced on June 13, 2014, that emails from Lerner between January 2009 and April 2011 to those outside of the IRS were lost due to a computer crash. Koskinen promised all documentation from Lerner would be handed over for investigation, but it was revealed in a letter that emails from that period could not be found. Chairman Dave Camp (R-MI) released a response, stating, "The Administration has repeatedly referred us back to the IRS for production of materials. It is clear that is wholly insufficient when it comes to determining the full scope of the violation of taxpayer rights." Chairman of the Oversight Subcommittee Charles Boustany Jr., (D-LA) questioned the administration's transparency claiming, "This is not the transparency promised to the American people. If there is no smidgeon of corruption what is the Administration hiding?"[17]

On June 13, 2014, Rep. Steve Stockman (R-TX) requested the metadata records of the emails from Lerner from the National Security Agency. The metadata requested, collected by the NSA program Stellar Wind, would not provide the content of the emails from Lerner, but the information would provide where the emails were sent from and where they were delivered. A spokesperson from Stockman's office justified the request, saying, "If the government can collect data on American citizens without a warrant and use it in court or investigation, there is no immunity exempting government officials from having their data collected without a warrant and used in court or investigations."[18] By June 17, 2014, Republicans insisted that emails from an additional six people had been lost. John Koskinen was subpoenaed to testify before the multiple House committees again, this time about the increasing number of lost emails over the highly-scrutinized period of time for the IRS.[19]

IRS employee bonuses

A report released by the Treasury Inspector General for Tax Administration revealed that in 2011 and 2012, 1,146 IRS employees received bonuses despite being delinquent on their taxes or facing disciplinary measures. Over $2.8 million were given to the employees as bonuses in addition to raises and paid time off. The report estimated $1 million was awarded to employees who failed to pay any federal taxes. Other disciplinary issues included "willful understatement of tax liabilities over multiple tax years, late payment of tax liabilities, and underreporting of income." Bonuses were suspended in 2013 due to sequestration, but were re-instated for fiscal year 2014.[20]

The IRS stated that 311,536 federal employees were delinquent on 2011 federal taxes, totalling $3.5 billion.[20]

Analysis

Budget

Obama administration

Internal Revenue Service Annual Budget
YearBudget (in billions)% Difference from previous year
2014$13.311.76%
2013$11.9-4.8%
2012$12.50%
2011$12.50%
2010$12.5N/A
  • Note: 2014 only represents the IRS' budget request, not an enacted budget.

Employment

The Best Places to work in the Federal Government is a website that tracks workforce trends in federal agencies. According to their analysis, from 2008-2012, the IRS lost an average of 843 jobs per year.[3]

Recent news

This section displays the most recent stories in a Google news search for the term Internal + Revenue + Service

All stories may not be relevant to this page due to the nature of the search engine.

Internal Revenue Service News Feed

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See also

External links

References

  1. 1.0 1.1 IRS, "The Agency, its Mission and Statutory Authority," accessed April 14, 2014
  2. Huffington Post, "John Koskinen Confirmed As Next IRS Commissioner By Senate," December 20, 2013
  3. 3.0 3.1 Best Places to Work in the Federal Government, "Internal Revenue Service (Treasury)," accessed April 17, 2014
  4. 4.0 4.1 IRS, "Brief History of IRS," accessed April 15, 2014
  5. 5.0 5.1 5.2 IRS, "Historical Highlights of the IRS," April 17, 2014
  6. Note: This text is quoted verbatim from the original source. Any inconsistencies are attributed to the original source.
  7. USA Today, "IRS knew of Tea Party profiling in 2011, report shows," accessed May 16, 2013
  8. Politico, "The IRS wants YOU- to share everything," accessed May 16, 2013
  9. Washington Post, "IRS officials in Washington were involved in targeting of conservative groups," accessed May 16, 2013
  10. Los Angeles Times, "Holder pledges to probe IRS handling of conservative groups," May 15, 2013
  11. CNN, "'Angry' Obama announces IRS leader's ouster after conservatives targeted," accessed May 16, 2013
  12. Wall Street Journal, "Lois Lerner, at Center of IRS Investigation, Retires," September 23, 2013
  13. Reuters, "FBI doesn't plan charges over IRS scrutiny of Tea Party: WSJ," January 13, 2014
  14. Time, "Emails Point to IRS Official’s Role in Targeting Conservative Groups," April 9, 2014
  15. Politico, "Republicans dare White House to ignore Lerner contempt," May 7, 2014
  16. Wall Street Journal, "IRS Sent FBI Database on Nonprofit Groups in 2010, GOP Lawmakers Say," June 9, 2014
  17. Ways and Means Committee, "IRS Claims to Have Lost Over 2 Years of Lerner Emails," June 13, 2014
  18. The Hill, "Conservatives turn to NSA for help getting White House records," June 17, 2014
  19. Politico, "GOP: IRS lost more emails in tea party affair," June, 18, 2014
  20. 20.0 20.1 USA Today, "IRS workers who didn't pay taxes got bonuses," April 22, 2014