IRS

abbreviation
Updated on: 13 Oct 2017

Definition of IRS

Internal Revenue Service

Examples of irs in a Sentence

  1. He was being audited by the IRS.


Financial Definition of IRS

IRS

What It Is

The Internal Revenue Service (IRS) is a bureau of the Department of Treasury that is tasked with the enforcement of income tax laws and oversees the collection of federal income taxes. In addition, it is also the responsibility of the IRS to determine pension-plan qualification.

How It Works

In 1862, President Lincoln and the U.S. Congress created the position of Commissioner of Internal Revenue and enacted the first income tax, which was later repealed. In 1913, the ratification of the sixteenth amendment granted Congress the authority to levy personal income-taxes, and the first 1040 form appeared later that same year, which imposed a 1% tax on personal incomes above $3,000.

The 1998 IRS Restructuring and Reform Act reorganized the IRS into four major divisions:

The Wage and Investment Division, for filers of individual and joint tax returns
The Small Business/Self-Employed Division
The Large and Mid-Size Business Division, for corporations with more than $10 million in assets
The Tax-Exempt and Government Entities Division, for employee benefit plans, charities, and governmental entities

Other divisions include Appeals, Communications and Liaison, and Criminal Investigation. The Office of Chief Counsel provides legal services to the IRS.

The IRS commissioner is appointed by the President with the advice and consent of the Senate. Prior to the IRS Restructuring and Reform Act of 1998, which limited a commissioner's tenure to five years, IRS commissioners served at the President's discretion.

[InvestingAnswers Feature: The Most Important Tax Changes to Know Before Filing Your Tax Return]

Why It Matters

The IRS is charged with obtaining the United States government's major source of funding. The IRS, through the U.S. Treasury, helps execute and enforce many of the crucial economic, financial, and tax policies that influence the economy.

[InvestingAnswers Feature: How to Avoid an IRS Audit]

For more information on the Internal Revenue Service go to {ia_ext|http://www.irs.gov|http://www.irs.gov}.


Law Dictionary

IRS

abbreviation

legal Definition of IRS


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