Internal Revenue Service Facts
Internal Revenue Service Facts

60 Interesting Facts about the IRS

By Tayja Kuligowski, Junior Writer
Published January 22, 2017
  • The Internal Revenue Service (IRS) is the world's largest financial institution, responsible for processing federal tax returns and collecting revenue for the United States government.[2]
  • In a Gallup poll conducted in May 2013, the IRS was the only government agency out of nine to rank in the majority as "poor" in performance. Regarding the IRS, 27% of responders chose "excellent/good," 29% chose "only fair," and 42% chose "poor."[17]
  • The IRS has a special Criminal Investigation (CI) branch made up of 3,500 employees worldwide whose main job is to investigate tax and money laundering. CI special agents have badges and are allowed to carry weapons but do not have uniforms. Qualified retired CI agents are exempt from concealed weapon laws.[1]
  • For the year 2012, the IRS CI investigated 4,600 individuals. A CI investigation can take a year or more.[5]
  • U.S. President John F. Kennedy established the Ideological Organizations Audit Project at the IRS, which primarily investigated seemingly right wing groups such as the Christian Anti-Communist Crusade, the American Enterprise Institute, and the Foundation for Economic Education.[4][11]
  • Franklin Roosevelt used the IRS to harass newspaper publishers who were opposed to his plans for the New Deal. The former president also used the IRS on political rivals and prominent Republicans, including an IRS audit of illegal campaign contributions made by a government contractor to congressman and future president Lyndon B. Johnson.[4]
  • Interesting Richard Nixon Fact
    Nixon used the IRS to harass political opponents
  • During his presidency, Richard Nixon encouraged a secret IRS program called the Special Services Staff, which investigated his political opponents as well as harassing them with audits. More than 10,000 individuals and groups were targeted between 1969 and 1973.[4][11]
  • The second article of U.S. President Richard Nixon's impeachment charged him with endeavoring to obtain confidential information from income tax returns for unlawful purposes from the IRS and to perform income tax audits and other income tax investigations in a discriminatory manner that violated the constitutional rights of U.S. citizens. After Nixon's impeachment in 1974, the U.S. Congress enacted legislation to greatly restrict political contacts between U.S. presidents and the IRS.[4]
  • The FBI has been known to use the IRS to harass political opponents. In 1964, they used the IRS to "discredit" the United Klans of America by illegally disclosing tax information about key members.[11]
  • In May 2015 it was revealed that the IRS had targeted conservative nonprofit groups for increased scrutiny surrounding their tax behavior during President Barack Obama's first term. However, President Obama did not condone the acts and was outraged by the report.[11]
  • The IRS is a United States government agency that consists of four primary divisions: Wage and Investment, Large Business and International, Small Business/Self-Employed, and Tax-Exempt and Government Agencies. Its mission statement is to "provide America's taxpayers top-quality service by helping them understand and meet their tax responsibilities and enforce the law with integrity and fairness to all."[1][9]
  • Previous to 1862, the government only collected sales tax on certain items such as alcohol and tobacco. President Lincoln created the IRS and enacted a 3% income tax on those who made between $600 and $10,000 to assist in covering Civil War costs. This would be repealed 10 years later.[3][7]
  • To help combat the growing number of tax frauds, in 2012 the IRS doubled the number of employees working to prevent identity theft and refund fraud prevention assistance to 3,000 workers.[18]
  • The only two things that scare me are God and the IRS.

    - Dr. Dre

  • After the initial income tax was repealed in 1872, the position of commissioner of Internal Revenue was once again in charge of taxes on goods such as sugar and tobacco. In 1894, income tax was enacted and then repealed a year later yet again, as Congress ruled it unconstitutional.[3][7]
  • The income tax system employed by the IRS that we know today would not be put into place until 1913 with the addition of the 16th amendment to the U.S. Constitution, which reads, "Congress shall have power to lay and collect taxes on incomes, from whatever source derived…."[7]
  • When the income tax was fully established in 1913, the tax rate was 1%. Few paid income tax to the IRS, as it was required only if you made $3,000 or more per year. That year only 1 out of 271 Americans had to pay income tax.[5]
  • When the IRS 1040 tax form was first introduced in 1914, it had only 3 pages including the instructions. Today, the 1040 has 101 pages of instructions alone.[6]
  • IRS commissioners are nominated by the current president and are confirmed by the U.S. Senate. The IRS Commissioner and Chief of Council are the only appointees in the agency; all other employees are civil servants.[1]
  • Before the Restructuring and Reform Act of 1998, which limits an IRS commissioner's term to 5 years, the position did not have a set term. The shortest commissioner's term was held by Robert E. Hannegan for 3 months and 14 days, while Guy T. Helvery served the longest at 10 years and 4 months.[1]
  • Interesting IRS Tax Fact
    Due to budget cuts and an increase of employees retiring, 35% of taxpayers find calls to the IRS go answered
  • In 2014, 35% of calls to the IRS were unanswered by IRS customer service representatives.[12]
  • The IRS was originally called the Bureau of Internal Revenue. In 1953, President Harry S. Truman changed the name to the Internal Revenue Service to go with the reorganization of the agency from a patronage system to professional employees.[1][8]
  • The original deadline for paying taxes to the IRS was March 1st, but this date was moved back to March 15th in 1918, and then again to the current date of April 15th in 1954. Both moves were to give the government more time to process tax returns as the number of tax filers increased over time.[13][15]
  • In fiscal year 2014, the IRS spent 38 cents for every $100 it collected.[1]
  • From October 2013 to August 2015, the IRS received reports of 600,000 tax scam contacts. This included information for almost 4,000 victims reporting a total of $20 million in financial losses to tax scams.[14]
  • The IRS has an extensive list of known tax scammers, each working through email, phone, fax, or letters. Many of the scams use convincing information in order to obtain a victim’s personal information or assets, such as IRS logos, names, and even website clones.[14]
  • In 2013, the IRS paid $5.2 billion in fraudulent identity theft returns.[12]
  • The IRS recognizes over 1.7 million organizations as tax exempt. The majority are religious and charitable organizations, which make up over 1 million of the 501 (c) tax-exempt forms.[9][18]
  • The IRS sends out more than 8 billion pages in forms and instructions every year.[16]
  • Interesting Facts about the IRS
    It takes Americans 6.1 billion hours collectively to file tax returns

  • The IRS website has over 1,977 different forms and publications, and the tax code is approximately 3.7 million words in length. Congress writes the tax code, while the IRS is in charge of understanding and enforcing it.[18]
  • In 2014, nearly 95,000 people worked for the IRS, and about two-thirds of its employees would recommend working for the IRS to a friend.[18]
  • The IRS audited less than 1% of individual returns in fiscal year 2014. If you make $1 million or more a year, however, your chance of being audited raises to 11%.[12]
  • The IRS estimates that the tax gap—money owed to the IRS that has gone unpaid—was $450 billion out of a total of $2 trillion collected. This means that about 20% of taxes were uncollected for fiscal year 2014.[12]
  • In 2007, 99,316,995 tax payers called, wrote, or visited the IRS—which amounts to 1 in 3 Americans.[6]
  • An estimated 15% of all taxpayers owe back taxes to the IRS.[5]
  • The IRS Intelligence Unit used undercover agents to gather evidence against gangster Al Capone in 1913. He was charged with tax evasion and received an 11-year sentence.[8]
  • IRS commissioner Joseph D. Nunan Jr. made a bet that Harry S. Truman would win the presidential election. He won the bet and $1800 but failed to report his winnings, which earned him a conviction of tax fraud in 1952.[17]
  • Little Known IRS Facts
    Dr. Martin Luther King Jr. was a target of an IRS audit from the FBI
  • In 1964, the FBI used the IRS to initiate an audit of Martin Luther King Jr. and his nonprofit, the Southern Christian Leadership Conference. They even went so far as to suggest that the bureau forge letters from King to donors of the nonprofit that warned of the ongoing IRS investigations, hoping to stem the group's cash flow.[11]
  • Some well-known citizens that have been involved in tax evasion cases from the IRS include Willie Nelson, MC Hammer, Marion Barry, Martha Stewart, Pete Rose, Nicolas Cage, Floyd Maryweather Jr., Lil Wayne, Lindsay Lohan, Stephan Baldwin, O.J. Simpson, and Vanessa Williams.[17]
  • For fiscal year 2014, the IRS processed 240 million tax returns and collected $3.1 trillion.[9]
  • In fiscal year 2014, the IRS audited 1.2 million taxpayers, which was a 12% decrease from the previous year. In total, 1.4 million tax returns were audited, which is about 0.7% of all returns filed.[9]
  • The number of employees employed at the IRS has dropped by 14% in the last 5 years due to budget cuts.[9]
  • Women make up 65.4% of IRS employees, which is higher than the average of 48.1% for the civilian workforce.[9]
  • There were 437 million visitors to the IRS website in fiscal year 2014, and the IRS2Go mobile app has been downloaded 5.4 million times since its creation. Out of the 118.7 million refunds processed, 157.2 million were filed electronically.[1][9]
  • In 2013, the IRS sent out more than 1.7 million notices to taxpayers for almost 2.3 million math errors found on tax returns. Most of the errors were associated with miscalculations of income or other taxes.[9]
  • The IRS performed 4,297 criminal investigations for fiscal year 2014, including for legal source tax crimes, illegal source financial crimes, and narcotics-related financial crimes.[9]
  • In fiscal year 2012, the IRS stopped more than 3 million tax returns, preventing about $20 billion in fraudulent refunds. Half of the tax returns involved identity theft and represented more than half of the potential money lost at $10.6 billion.[1]
  • The IRS can issue an audit up to 3 years after your taxes were filed and up to 6 years later if you are suspected of underreporting your income by at least 25%. If you are suspected of fraud, the limit is indefinite.[5]
  • Interesting IRS Audit Facts
    If you are self-employed or have a higher income, your chance of being audited raises significantly

  • The Taxpayer Advocate Service (TAS) is an independent organization within the IRS created to help taxpayers resolve problems with the IRS and make recommendations for changes to prevent problems in the future. For fiscal year 2014, the TAS received 216,697 requests for taxpayer assistance.[9]
  • In 2014, the U.S. General Council received 31,244 tax court cases involving taxpayers contesting an IRS determination involving $6.2 billion in disputed taxes and penalties.[9]
  • The IRS is active on social media, with accounts on Facebook, YouTube, Twitter, Tumblr, and Google+. It uses the accounts to update the public about changes to tax information, initiatives, and products and services.[10]
  • Part of the difficulty of understanding taxes has been the ever-changing tax code. From fiscal years 2000 to 2010, the IRS implemented over 4,000 changes to the tax code, with 570 of the changes taking place in 2010 alone.[1]
  • Under the Freedom of Information Act (FOIA), the IRS must give a person access to all of their files, as well as information about internal IRS operations. Information about other taxpayers, however, is protected under the Privacy Act, and the IRS does not have to release information about how its Criminal Investigation branch conducts investigations, including whether or not a person is under investigation.[5]
  • The IRS can make your tax information public through tax liens or tax crimes. Tax liens are public records of those who owe back taxes, while being suspected of tax crimes can cause your information to be released during a public trial.[5]
  • Over 50% of Americans file their taxes to the IRS before April 1st, while 5% get an extension to October 15th. About 10% of American citizens do not file at all.[5]
  • Interesting Tax Cheat Fact
    The IRS Whistleblower Office rewards those who blow the whistle on persons who fail to pay their taxes
  • Reporting a tax cheater to the IRS can earn you up to 15% of the amount collected as a reward, with a maximum reward of $10 million.[5]
  • The IRS does not have a tax amnesty program, so no penalties or interest on late taxes can be forgiven. Failing to pay taxes can potentially result in 1 year of prison for every year taxes are not filed, up to 6 years maximum. Usually the IRS chooses to apply fines and penalties over jail time, with fines reaching up to $25,000 each year that taxes are not filed.[5]
  • The largest department in the IRS is the Small Business/Self-Employed division, with about 47,000 employees.[5]
  • While most taxpayers have less than a 1% chance of being audited, these chances rise to 50% if they are self-employed.[5]
  • The IRS wins 80% of all audits, mostly because taxpayers cannot properly verify the information on their tax returns.[5]
  • A taxpayer can sue the IRS for up to $1 million if an IRS collector willfully disregards the law.[5]
References

1"About IRS." IRS. Updated August 31, 2015. Accessed November 11, 2015.

2"At-a-Glance: IRS Divisions and Principal Offices." IRS. Updated August 31, 2015. Accessed November 16, 2015.

3Boortz, Neal and John Linder.The Fair Tax Book: Saying Goodbye to the Income Tax and the IRS. New York, NY: Harper Collins, 2005.

4Bovard, James. "A Brief History of IRS Political Targeting." The Wall Street Journal. May 14, 2013. Accessed November 13, 2015.

5Daily, Frederick W. Stand Up to the IRS. New York, NY: Nolo, 2012.

6Erb, Kelly Phillips. "9 Fun Tax Facts on Tax Day to Help Ease the Pain." Daily Finance. April 15, 2010. Accessed November 13, 2015.

7Hellman, Chris. "Top Five 'Fun' Facts about the IRS." National Priorities Project. April 11, 2012. Accessed November 11, 2015.

8"Historical Highlights of the IRS." IRS. Updated January 23, 2015. Accessed November 16, 2015.

9"Internal Revenue Service Data Book 2014." IRS. March 2015. Accessed November 13, 2015.

10"IRS News Media." IRS. Updated November 9, 2015. Accessed November 16, 2015.

11Scherer, Michael. "New IRS Scandal Echoes a Long History of Political Harassment." Time. May 14, 2013. Accessed November 13, 2015.

12Stone, Amey. "10 Facts the IRS Doesn't Want You to Know." The Fiscal Times. February 4, 2015. Accessed November 13, 2015.

13Sung, Jessica. "Why Is Tax Day April 15?" Fortune. April 15, 2002. Accessed November 18, 2015.

14"Tax Fraud Alerts." IRS. Updated October 29, 2015. Accessed November 11, 2015.

15Terrell, Ellen. "History of the U.S. Income Tax." Library of Congress Business Reference Services. Updated 2012. Accessed November 13, 2015.

16Wang, Jim. "50 Fun Facts about Taxes." Bargaineering. April 15, 2008. Accessed November 13, 2015.

17"What Is Tax Evasion and a List of Tax Cheaters." efile. 2015. Accessed November 13, 2015.

18Williams, Sean. "10 Incredible Facts You Probably Don't Know about the IRS." The Motley Fool. February 8, 2014. Accessed November 11, 2015.

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