The Internal Revenue Service (IRS) is the United States federal government agency that collects taxes and enforces the internal revenue laws. It is an agency within the U.S. Department of the Treasury and is responsible for interpretation and application of Federal tax law. The official U.S. Treasury regulations provide (in part):

Bureau of Internal Revenue

In July 1862, during the Civil War, President Lincoln and Congress created the office of Commissioner of Internal Revenue and enacted an income tax to pay war expenses (see Revenue Act of 1862). The position of Commissioner exists today as the head of the Internal Revenue Service.

The IRS has its National Capital offices in the greater Washington, D.C. area, and in particular does most of its computer programming in Maryland. It operates various service centers around the country (currently ten; these are the locations to which taxpayers mail their returns); these centers do the actual tax processing; different types of tax processing take place in various centers (such as the distinction between individual and business tax processing). The IRS also operates three computer centers in various locations around the country.

Name change and reorganization

As early as the year 1918, the Bureau of Internal Revenue began using the name "Internal Revenue Service" on at least one tax form. In 1953 the name change to the "Internal Revenue Service" was formalized in Treasury Decision 6038.

In the 1950s, career professional employees replaced the patronage system. Currently, only the IRS Commissioner and Chief Counsel are selected by the President and confirmed by the United States Senate.

Reorganization of the late 1990s

A bipartisan commission was created with several mandates, among them to increase customer service and improve collections. Congress later enacted the Internal Revenue Service Restructuring and Reform Act of 1998. As a result of that Act the IRS now functions under four major operating divisions: Large & Mid-Size Business (LMSB), Small Business / Self-Employed (SB/SE), Wage and Investment (W&I), and Tax Exempt & Government Entities (TE/GE). The IRS also includes a criminal law enforcement division. While there is some evidence that customer service has improved, lost tax revenues in 2001 were over $290 billion.

Flooding at IRS headquarters building

On December 8th, 2006, the IRS said in a press release that "the phased move-in of more than 2,000 IRS employees" had begun. Most staff would have returned by December 19th but "a small number of employees will return after Jan. 1."