9 Facts About the IRS and Taxes
Most would acknowledge that taxes are an important way to keep the country running. Few people would say they enjoy paying taxes.
The Internal Revenue Service is pivotal to our success as a nation. So, it’s no surprise that this agency is highly regulated and closely scrutinized.
Here are a few facts about the IRS that you may not have known.
1. The IRS first began during the Civil War
To cover Civil War expenses and keep the Union – and our military – going, the U.S. government needed more money. To solve this problem, Congress created the Commissioner of Internal Revenue in 1862.
The Commissioner and his department enacted an income tax to pay for Civil War expenses. Before this, taxes and tariffs earned on goods such as tobacco and sugar were enough to keep things running.
Ten years after it was first started, income tax was repealed. It went through some back and forth, then, in 1913, declared legal again. That year, the federal income tax was re-enacted with the ratification of the 16th Amendment.
2. The IRS was tasked with enforcing Prohibition in the 1920s
Speaking of back-and-forth, there has been an array of responsibilities for the agency over the decades!
For instance, prohibition. The Volstead Act led to the creation of a Prohibition Unit within the IRS. This unit enforced the law of Prohibition for 9 years. Then, the responsibility transferred to the Department of Justice.
3. They have a lot to keep up with
The federal tax code changes every year as tax brackets adjust for inflation. Not only that, but the organization itself has been through some large changes over the years.
In the 1950s, the agency reorganized and changed its name. It also revoked a patronage system of hiring.
In 1998, the Internal Revenue Service Restructuring and Reform Act passed. The act aimed to increase the fairness of tax collection. It aimed to make the IRS more customer-centric and accountable. And, it was intended to improve the agency overall.
In 2019, an IRS Modernization Plan was released. In 2022 came the Inflation Reduction Act. Both of these intended to further improve the experience of the average taxpayer.
All that, and business as usual must go on! During the annual tax filing season in 2022, the IRS filed close to 150 million returns. That same year they issued nearly 98 million refunds.
4. The tax code is over 70,000 pages long
Title 26 of the U.S. Code, referred to as the Internal Revenue Code (IRC), contains nearly all our federal tax laws. It’s available to read for free online by anyone who wishes to see it, and you can also buy printed volumes.
This isn’t too surprising - the IRS is thorough. There are also more than 800 types of tax forms and schedules alone!
5. They’re hiring – and employees really like it there
During FY 2021, the IRS had just under 79,000 full-time employees. About 44% of these were “enforcement” positions. Another 40% were “dedicated to taxpayer services.”
In 2022, they hired over 4,000 new customer service representatives. The Inflation Reduction Act is in large part responsible for this. And in a 2019 FEVS survey, 68% of IRS employees stated that they were happy in their jobs.
Some things that may factor into this satisfaction? A special University for employees, and a New Employee Ambassador Program. Plus, an IRS Veterans Employment Program Office. The agency is committed to its employees.
6. It’s not all pencil-pushing
Sure, they employ Tax Examiners, Mathematical Statisticians, and Internal Revenue Agents. But they also have Policy Analysts and Social Scientists. They hire Communications Specialists, and Criminal Investigation Special Agents. And that's just to name a few. You name it, you can do it while working for the IRS.
7. They have armed enforcement agents – but not quite like you may think
The IRS Criminal Investigation (IRS-CI) unit is an official law enforcement branch. They have about 3,700 employees – 2,600 of which are special agents. And they aren’t knocking on the door of your neighbor who filed late last year. They focus on bigger things
IRS CI agents investigate tax, money laundering, and Bank Secrecy Act violations. They have sole responsibility for investigating possible criminal violations of the Internal Revenue Code. They're skilled in forensic technology, investigative skills, and of course, accounting skills. They investigate, execute search warrants, and make arrests.
The IRS-CI works with the DEA, FBI, Customs and Border Protection, and more. They work on drug and money-laundering cases, keeping our nation safer, and recovering billions of dollars for the U.S.
8. The IRS took down Al Capone
He was sought after by other law enforcement agencies for a multitude of crimes. However, it ended up being the IRS that finally put Capone behind bars in 1931. For years law enforcement followed him. For years, attempts to take the infamous gangster off the streets were unsuccessful.
The IRS-CI managed to build a case and show that he had made millions and never paid a dime in federal taxes (or even filed a return). He was indicted on 22 counts of income tax evasion and found guilty.
9. Our Tax Dollars are important!
Taxes pay for Social Security, Medicare, Medicaid, and Veterans benefits and services. They go towards funding law enforcement and defense, education, and transportation. And that’s just a general overview.
According to Robin D. Bailey Jr., Human Capital Manager at the IRS from 2018-2020,
“When discussing the mission of the IRS with prospective or new employees, I ask them to look beyond the language in our mission statement because our mission is far greater... I often characterize the IRS as the heartbeat of America."
Bailey goes on to share that "Each year, we...generate approximately 96 percent of the funding that supports the federal government’s operations. The work we do supports the nation’s most vital programs, from homeland security to America’s defense, to Social Security, as well as programs and projects that are a bit closer to home, like parklands and forests, roads and bridges, libraries, museums, schools, and more.”
That’s a serious impact.
Article authored by and containing the opinions of Starr Wright USA. This article is offered solely for informational purposes.
Starr Wright USA is a marketing name for Starr Wright Insurance Agency, Inc. and its affiliate(s). Starr Wright USA is an insurance agency specializing in insurance solutions for federal employees and federal contractors. For more information, visit wrightusa.com. Starr Wright USA is a division of Starr Insurance Companies, which is a marketing name for the operating insurance and travel assistance companies and subsidiaries of Starr International Company, Inc. and for the investment business of C.V. Starr & Co., Inc.