IRS Building Occupants

Internal Revenue Service (IRS)

A bureau of the Department of Treasury, the IRS is the federal agency responsible for collecting taxes and interpreting and enforcing the Internal Revenue Code. The roots of the IRS go back to 1862, at the height of the Civil War, when an income tax was temporarily enacted to pay war expenses. The Supreme Court struck down the Civil War income tax, leading to the 1913 ratification of the 16th Amendment, which give Congress the constitutional authority to enact a federal income tax. In 1918, during World War I, the top rate of the income tax rose to 77 percent to help finance the war effort. It dropped sharply in the post-war years, down to 24 percent in 1929, and rose again during the Depression. During World War II, Congress introduced payroll withholding and quarterly tax payments. Today, the IRS collects more than $2 trillion in annual taxes and processes more than 230 million tax returns.

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Last Reviewed 2016-08-19