A Brief History of the IRS
The roots of the IRS and a tax preparation service go back to the Civil War when in 1862, President Lincoln and Congress came up with the position of commissioner of Internal Revenue and enacted an income tax in order to pay for all the war expenses. This was repealed ten years later, though. Congress revived it in 1894; however, the Supreme Court ruled it unconstitutional the following year.
16th Amendment
In Wyoming in 1913, the 16th Amendment was ratified, providing the three-quarter majority of states to amend the Constitution. The 16th Amendment provided Congress the authority to enact an income tax. That very same year, the first Form 1040 showed up after Congress levied a 1% tax on personal incomes that were above $3,000 and a 6% surtax on incomes that were above $500,000.
In 1918, during the first World War, the top rate of the income tax increased to 77% to help finance the war, after which it dropped significantly in the post-war years down to 24% in 1929, and then increased during the Depression. During World War II, Congress created payroll withholding and quarterly payments.
A New Name
In the 50s, there was a reorganization to replace a patronage system with professional employees and careers. The Bureau of Internal Revenue was changed to the Internal Revenue Service. And only the the IRS chief counsel and the commissioner is chosen by the president and confirmed by the Senate.
Today’s IRS Organization
The IRS Restructuring and Reform Act of 1998 was what prompted the most comprehensive reorganization f the IRS in almost 50 years. The IRS reorganized closely resembled the private sector model, as it was organized around customers that had similar needs.
If you would like to make an appointment with a reputable tax preparation service, please do not hesitate to call Serita Lombard, CPA at (770) 443-5437 now if you live in or around the Dallas, GA region.