Introduction

            Internal Revenue Service is an agency of the United States federal government that deals with tax collection and enforcement of tax laws.  It belongs to the federal government’s department of treasury.  The agency has a mission to make the tax payers understand their roles in the nation and to ensure that they pay the taxes.  These missions are set and written under a statement that indicates the role of Internal Revenue Service (Commerce Clearing House, 2005).

            The statement reads that the tax laws are passed by the congress and that the tax payers should comply to tax and payment rules, that the tax payer has the role of understanding the reason for paying tax and complying by paying tax, and that the agency, has the responsibility of making those citizens with complains about tax rates, conditions and other tax laws understand them, and ensuring that those individuals that evade taxation do pay their taxes (Commercial Clearing House, 2006).

            The need for interdependence was realized in the year 1862 when the tax paying agency was formed.  During war times, the citizens of United States of America needed protection from other countries, the government could not raise all the funds to meet war expenses, under the rule of the then president Lincoln and the United States congress, the government decided to seek funds from the public (Schmeckebier and Eble, 2007).

            This then was the beginning of taxation.  There are various reasons for taxation and these are the basis for formation of the Internal Revenue Service (Schmeckebier and Eble, 2007).

Internal Revenue Service deals with excise taxes, estate, corporate and gift taxes as well as collects taxes from employment and individuals.  It is responsible for the administration of all types of taxes (Commerce Clearing House, 2006).

            Internal revenue Service as has been shown has the responsibility of formulating laws on taxes and collecting taxes from the citizens of United States of America.  Due to the changing world and new technology, the Internal Revenue Service agency has evolved and formed new operation procedures with different new structures.  Today’s Internal Revenue Service has changed due to one act that was passed in the year 1998, operating for a long period of time and other factors that will be discussed.  The act which was known as the restructuring and reform act, changed the system of Internal Revenue Service into a modern and reorganized one (Shafiroff, 2008).

            Internal Revenue Service agency has a three commissioner level organizational structure which was developed to ensure accountability and support for the structure of the agency.  These commissioner level organizations are; the commissioner, the services and enforcement deputy commissioner and the operations and support deputy commissioner.  This is the structure of the Internal revenue Service currently (Commercial Clearing House, 2006).

Internal Revenue Service Administration law enforcement

            Apart from revenue collection, Internal Revenue Service issues rulings on revenue and private letter rulings. The rules and regulations on taxes and revenue enable tax payers to know more about how tax is collected, what is required of them and how to pay taxes.  Internal Revenue Service also gives them the rules to follow when claiming any refunds, over taxation or any other problem with taxation (Shafiroff, 2008).  The rules of the revenue today are dependent on the trend of the world today.  Individuals pay taxes based on their incomes while businesses are taxed according to the type of business, and so many other specified conditions by the Internal Revenue Service (Commerce clearing House, 2006).

            The system of paying taxes is through computerized and mailing systems, and the terms and conditions have changed since the time taxation was first introduced.  The kind of systems used in taxation payment today is collecting revenues by direct deductions from banks.  Internal Revenue Service agency also develops procedures that assist tax payers to correct errors of taxation (Schnepper, 2006).

            Internal Revenue Statutory Authority Responsibility:  IRS under the Internal Revenue code is responsible for carrying out the treasury secretary’s responsibilities.  The role of the secretary of treasury is to administer and enforce the laws of internal revenue.  The secretary is given the authority to conduct such responsibility and has the power to form an agency that can create and enforce the laws (Shafiroff, 2008).

            Internal Revenue Service has capital offices in Washington D. C. and has computerized  operations in Maryland.  It has ten service centers through which it operates and where the returns on taxation are mailed by the taxpayers.  In the operations of the current Internal Revenue Service, different methods of operations have been implemented for example the debt collection using outsourcing collection (Schmeckebier and Eble, 2007), computerized tax administration system and the development of returns mailing system (Ceruzzi, 2005).

            All these processes and duties of the Internal Revenue Service have changed since the time when taxation started.  The kind of structure that the Internal Revenue has today when compared to the kind of structure that was there in the old days shows a great change.  The old structure was a seven level, but this has been reduced to a three level administrative structure.

The History and Evolution of United States Revenue Agency

            The Bureau of Internal Revenue was formed in the year 1862 during civil war times when the then president of United States of America Lincoln, realized the need for public contribution to the war expenses.  The president and the congress formed an office in the Internal Revenue which was headed by a commissioner and started a taxation on incomes (Schmeckebier and Eble, 2007).  Internal Revenue was known as the Bureau of Internal Revenue by then and had the intention of collecting revenue from the internal sources of the country.  United States had revenue collection institutions by then, but only collected revenue from the external sources such as from tariffs and duties (Schmeckebier and Eble, 2007).

Making Income Tax Formal

            In 1872, income tax was not allowed and so collection of taxes from internal sources was stopped.  After 22 years, the Bureau of Internal Revenue was revived and collection of taxes as had been during the civil war started.  This went on for a year before a stop from the constitutional law which raised arguments that it was unconstitutional to collect taxes from the internal sources.  Internal revenue was not collected until after eighteen years that the income tax came to be enacted (Schmeckebier and Eble, 2007).

            This was in the 16th amendment.  This kind of amendment in the constitution allowed a constitution to be rectified by three quarters majority.  This 16th amendment gave the congress another chance to enact the income tax.  It is from this that income tax has existed and has not been interfered with again.  It is in this same year 1913, that an income tax form was first developed, a form known as form1040.  This form indicated how the income tax was suppose to be collected, who was to pay tax, other sources of tax collection and how they were collected, and other tax collection instructions (Schmeckebier and Eble, 2007).

Change of name

            The federal agency, in the year 1918 started using the name in a few of the Bureau of Internal Revenue forms.  It was not made formal until the year 1953 when a treasury decision ‘6030’, changed the Bureau of Internal Revenue’s name to Internal Revenue Service (Schmeckebier and Eble, 2007).  The agency had been operating on a patronage system, in the year 1950, this was reorganized to a career professional employee system.  In this kind of system, all other employees were employed following the reorganization while the Internal Revenue Service commissioner and the chief counsel, were selected by the president then confirmed by the senate  (Schmeckebier and Eble, 2007).  This kind of system is still operational in the current Internal Revenue Service.

Reorganization and reconstruction of the Internal Revenue Service

            In the year 1998, the new and today’s operational structure of the Internal Revenue Service was formed.  The old structure of the agency was reconstructed and reorganized to a new model agency.  This was following the enactment of the reform and restructuring act in 1998.  This enactment was as a result of the need by the Internal Revenue Service to make improvements in their collection and customer service quality (Schmeckebier and Eble, 2007).

            This last change in the evolution of the Internal Revenue Service lead to division of the operations into four which are the current areas of function.  Internal Revenue Service currently functions under Wage and Investment division, Self employed /Small Business section, Government entities and Tax division, and Large and Middle size business section.  There is a separate and important division that the Internal Revenue Service functions under, which deals with the enforcement of laws known as enforcement of criminal law division (Schmeckebier and Eble, 2007).

            The reconstructed and reorganized Internal Revenue Service changed into a private model system similar to business models that value customer satisfaction.  The formed system, as have been indicated in the current Internal Revenue Service objectives, ensures that taxpayers understand their role in the society and the need to pay tax, provides rules, terms and conditions of tax payment, provides taxpayers with corrective measures if errors are made in the revenue collection process, and ensures that any person or organization under the class of paying tax complies with the rules, terms and conditions (Commerce Clearing House, 2006).

Discussion

            Internal Revenue has evolved since the year 1862 when just the need for meeting war expenses lead to income taxation till today that income taxation has become a United States of Americas citizen’s responsibility (Schmeckebier and Eble, 2007).  The simple beginning of income taxation started making great changes when the income tax was made constitutional in the 16th amendment resulting into a formal system of income taxation.  Then a form meant for taxation was developed to help the agency in collection of revenue.  This was the form 1040.  This form exists in the Internal Revenue system of United States up to today though with little improved rules and regulations.

            The rules under which the income taxes were collected, and the terms and conditions, were indicated in the instructions at the bottom of the 1040 form (Schmeckebier and Eble, 2007).  These rules have changed since the time they were formulated to the time they are being used now.  Among the factors that have caused change in the rules or improvements in the rules, are the daily challenges that the Internal Revenue Service face when collecting revenue.  Evading taxes has been one of the problems that the Internal Revenue has had, making the agency to change the rules to be able to deal with such cases.

            At the beginning of revenue collection from income taxes, the punishments of citizens evading taxes were different.  The world today has changed and various ways of evading taxes have been formed by the citizens.  Internal Revenue Service has the responsibility of ensuring that every one in United States of America, classified under the rules of the Internal Revenue Service as suppose to be paying taxes, comply.  The added responsibility is finding ways or the methods these people use to avoid paying task and enforce new rules on such kind of people.

            This kind of experience has also contributed to the evolution of the Internal Revenue Service to what it is currently.  This means that the punishments and the rules of evading taxes have to be reviewed by the Internal Revenue agency and appropriate laws for tax evasion be enforced.  The need for improved customer service and increased revenue collection also lead to the formation of a new reconstructed and reorganized structure that could enable the agency to attend to the services of the taxpayers efficiently and collect more revenue.

            When the income tax was enacted in the year 1913, the structure of the Bureau of Internal Revenue was not as it is today, the current structure has three levels as compared to the old one which had seven levels, the commissioner, and two deputy commissioners.  The formation of new ways of making people pay taxes has lead to a different structure of the agency that requires the three levels of the organization to ensure accountability of the agency.  The 1913 Internal Revenue agency has evolved progressively till the agency is now a well organized and restructured agency.

            During the years of evolution, there is an act that was passed in 1998 that played a big role in forming what Internal Revenue Service is today.  The structure and model as have been indicated changed from the old one to a modernized and reorganized agency with resemblance to the private sector model of operation to ensure customer satisfaction.  The old Internal Revenue agency when was formed, did not consider taxpayer’s satisfaction.  The year 1998 changed everything to make the federal government’s agency, that values the people and the sources from which income tax is collected internally.

            The main factors revealed to have caused the evolution of the tax collection agency are;  enactment of acts that totally change the system and the changing world.  Enactment of acts are such as making the income tax collection constitutional and the 1998 act on reconstruction and reform.  The changing world means the new technology that requires the system of the Internal Revenue Service to change the system as years go by.

            The current Internal Revenue Service has computer centers that it uses to operate within the capitals in which it operates.  When the agency started, the administration of tax collection was not computerized.  Another change evident is the system that the taxpayers use to forward their returns.  Internal Revenue Service has ten centers at which the taxpayers are expected to mail their returns.  This kind of returns’ collection was not available at the beginning of the income tax collection.

Conclusion

            Internal Revenue Service has expanded until the revenue collected contributes a large part of the country’s income since in was formed in the eighteenth century.  The evolution of Internal Revenue Service has happened gradually with four evident changes.  The change of the structure due to the need for improved service provision, taxpayers needs and need to make more collection, formalizing the income taxation in the constitution and the change of name from bureau of Internal Revenue Service to Internal Revenue Service, which also explains the change of the agency’s operations.

            This agency when formed, was a bureau, as years went by, revenue collection changed prompting formation of sections that could assist in the expanding organization, the name then changed from a bureau to a service agency.  Internal Revenue Service evolved gradually over along period of time (146 years) from 1862.  This paper gives a discussion of the current tax collection agency, the history of United States agency and how the federal government agency has evolved since it was formed during civil war times.

References

Ceruzzi, E. P. (2005) A History of Modern Computing. USA: MIT Press.

Commerce Clearing House, United States Tax Court, CCH Incorporated, United States Dept. of          the Treasury. (2006). The History of Internal Revenue Service. University of Michigan: Commerce Clearing House.

Schnepper, J. A. (2006). How To Pay Taxes: Your Guide to Every Tax Break the IRS Allows. New York: McGraw-Hill Professional.

Schmeckebier, F. L. and Eble, A. X. F. (2007). The Bureau of Internal Revenue: Its History,     Activities and Organization. California: Johns Hopkins Press.

Shafiroff, I. R. (2008). Practicing Law Institute: Internal Revenue Service Practice and Procedure        Desk book. United States: Practicing Law Institute.

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