Internal Revenue Service (IRS) Definition and Legal Meaning

On this page, you'll find the legal definition and meaning of Internal Revenue Service (IRS), written in plain English, along with examples of how it is used.

What is Internal Revenue Service (IRS)?

U.S. Treasury Department agency that is responsible for tax collection as well as administering and enforcing the U.S. tax laws.

History and Meaning of Internal Revenue Service (IRS)

The Internal Revenue Service (IRS) is a bureau of the Department of the Treasury established in 1862 during the Civil War. The initial aim was to collect taxes on income and other goods, with the goal of financing the Union's efforts in the war. After the war, the IRS continued to collect taxes and became a permanent bureau of the Treasury Department in 1913 with the passage of the 16th Amendment to the Constitution. The IRS is responsible for collecting federal taxes, including income, corporate, and excise taxes.

The agency's duty also involves issuing guidance on tax laws and regulations, enforcing tax laws, and investigating and auditing tax returns. With the increasing complexity of tax laws, the IRS has been taking advantage of technological advancements to enhance tax compliance and administration. Despite the agency's critical role in funding the government's activities, it is often a controversial agency due to its significant powers to enforce tax laws.

Examples of Internal Revenue Service (IRS)

  1. Mary hired a tax attorney to help her negotiate a payment plan with the IRS for her outstanding tax debt.
  2. The IRS has extended the tax filing deadline to July 15th for taxpayers affected by the COVID-19 pandemic who are unable to file their taxes by the original date.
  3. The IRS has sent a notice of audit to John, informing him that he needs to provide documentation of his reported income for the past three years.

Legal Terms Similar to Internal Revenue Service (IRS)

  • Department of Treasury: The federal agency that manages the government's revenue, including the IRS.
  • Taxation: The act of levying and/or collecting taxes by a government.
  • Tax Law: The legal rules and regulations surrounding taxation and the collection of taxes.
  • Taxpayer: A person or entity who is subject to taxation on income, property, or other goods.