Internal Revenue Service

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Internal Revenue Service

Table of Contents




Purpose of paper5

Origins of the Internal Revenue Service5

Revenue Act of 18626


The Wilson Tariff Act6

The Prohibition era8

Influence of World War II9

The BIR becomes the IRS9

Current divisions of the IRS12

Modernization of the IRS13


Importance of the IRS13

Need for a proactive approach14



The paper analyzed the history of the IRS and the developments that the IRS has undergone since its inception. The purpose of the paper was to acquire an understanding of the underlying problems of the IRS in an attempt to derive recommendations that can assist the IRS in resolving the established problems. The discussion established that there is a need for the IRS to engage in a pro-active approach towards policy implementation; mainly because a majority of the developments that the IRS has experienced in the past are reactionary measures.


Introduction to Internal Revenue Service

Presentation of purpose of paper

Origins of the Internal Revenue Service

The establishment of the Revenue Act of 1862


The Wilson Tariff Act of 1894

The Prohibition era

Positive influence of World War II on tax payment trends

The BIR becomes the IRS

Current divisions of the IRS

Modernization of the IRS during the 1980s and 1990s

Conclusions & Recommendations

Importance of the IRS

Need for a proactive approach

Internal Revenue Service


The IRS is currently recognized as the largest fully functioning bureau in the infrastructure of the US Treasury Department. The IRS is charged with the responsibility of ensuring that the statutes relating to the remission and reporting are met. The IRS gives particular consideration of statutes that relate to income based taxes. The scope of this function of the IRS spans both individuals and organizations. As a result, the IRS serves as a critical part of the nation's economy. The functions of the IRS yield results that contribute towards the effective operation of the economy.

Purpose of paper

The following discussion will attempt to shed light on the IRS by elaborating on the history of the IRS. By doing so, the discussion will emphasize on the current situation of the IRS and conclude by presenting suggestions that the IRS can follow for improvement.

Origins of the Internal Revenue Service

The origins of the IRS can be traced back to the fall of1861 when the Revenue Act was brought forth and imposed. The Revenue Act formalized the infrastructure that prevailed in the case of property tax amongst other taxes. It is essential to note that the Revenue Act was the first formal introduction of the federal income tax in the country. The context and rationale for the Revenue Act and its constituting statuettes was the Civil War (Daige, 2007). Furthermore, in those days, income tax was imposed in the form of a flat tax.

Revenue Act of 1862

The implementation of the Revenue Act was not subjected to consideration until the summer of 1862. The sudden move to implement the Revenue Act came from the desire to bring the Revenue Act of 1862 into practical implementation. The Revenue Act of 1862 placed tax regulations on employers and led to the development of the Bureau of Internal ...
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