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In 1862, during the US Civil War, President Lincoln and Congress created the position of Commissioner of Internal Revenue and enacted an income tax to pay war expenses. The income tax was repealed ten years later. Congress revived the income tax in 1894, but the Supreme Court ruled it unconstitutional the following year.

In 1913, the 16th Amendment gave Congress the authority to enact an income tax. That same year, the first Form 1040 appeared after Congress levied a 1 percent tax on net personal incomes of more than $3,000, with 6 percent surtax on incomes of more than $500,000.

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 postwar 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.

In the 1950s, the agency was reorganized to replace a patronage system with career, professional employees. The Bureau of Internal Revenue’s name was changed to the Internal Revenue Service (IRS). The IRS Commissioner and Chief Counsel are selected by the president and confirmed by the Senate.

The IRS Restructuring and Reform Act of 1998 prompted the most comprehensive reorganization and modernization of the IRS in nearly half a century. The objective of the act was for the IRS to reorganize itself in a way that would resemble the private sector model of organizing around customers. Few outside of the IRS would say that objective was met.

The IRS is a bureau of the Department of the Treasury and in fiscal year 2010, the IRS collected more than $2.3 trillion in revenue and processed more than 230 million tax returns.

The following mission statement describes the roles of the taxpayers and the IRS:

• In the United States, the Congress passes tax laws and requires taxpayers to comply.

• The taxpayer’s role is to understand and meet his or her tax obligations.

• The role of the IRS is to help the large majority of compliant taxpayers with the tax law, while ensuring that the minority who are unwilling to comply pay their fair share.

The IRS is organized to carry out the responsibilities of the Secretary of the Treasury. The Secretary has full authority to administer and enforce the internal revenue laws and has the power to create an agency to enforce these laws. The IRS was created based on this legislative grant.

The Internal Revenue Code provides for the appointment of a Commissioner of Internal Revenue Service to administer and supervise the execution and application of the internal revenue laws.