Introduction:
IRS is the paramount authority for the taxation procedure of the US. It is a bureau of the Department of Treasury and is one of the most efficient and most opulent tax administrations in the world.
History:
Its commencement dates back to the 19th century in the advent of the American Civil War. The, then, President Abraham Lincoln passed an act ‘The Revenue Act of 1962’ to the emergency war situation and was named ‘The Bureau of Internal Revenue’, which was repealed after ten years, in 1872. It was started again by the Congress in 1894 and was amended in 1913. During the World War I the tax rate had reached, as high as 77%. It became a much organized and a noticeable employing agency in the 50s of the last century. The dusk of the previous century saw the first time use of internet for filing tax returns. IRS does not have an online tax filing software. It is the responsibility of the concerned CPAs (Certified Public Accountant) to file returns electronically and submit them to the IRS.
Functions:
The IRS carries out four basic functions of Examination, Appeals, Collection and Criminal Investigation. The examination function involves the assessment of the returns with respect to the documents provided by the individuals and other taxpaying bodies. Appeals function involves the customer grievances and the necessary actions are taken by the IRS accordingly. The Collection function concerns with the collection of the money from various sources, and generally it is the bank account of the taxpayer. The Criminal Investigation Department comes into action when it comes across or notices any tax frauds. They inform the IRS about the factualness of the complaint or the fraud and then the IRS has the authority to take legal actions against the culprit.
Put Downs:
Being one of the most effective tax administrations, the IRS has had its share of criticism. It has failed on the Audit done by the General Accounting Office. The Criminal Investigation Department has been accused of insolent behavior towards taxpayers. The training provided to the employees is too difficult and hence ineffective, many a times.
Inspite of all this, it still is the most audacious, accomplished and one of the wealthiest tax jurisdictions and tax surveillance across the globe.
