Internal Revenue Service

Clutching your W-2s, feel a shiver down your spine? Right here at the Internal Revenue Service building in Philadelphia, that very form, the 1040, has a fascinating history. Did you know the 1913 version only required filing for incomes over $3,000? That’s about $92,500 today! The Internal Revenue Service, an institution many Americans have a complex relationship with, wasn’t always the IRS. Born from the fires of the Civil War, it began as the Office of Commissioner of Internal Revenue in 1862. Its purpose? To fund the Union’s war effort through a temporary income tax. This tax, modeled after the British system, initially impacted only a small percentage of households. It was a 3% levy on income over $800. Later, the rate became 3% on income between $600 and $10,000 and 5% on anything above. Imagine the public outcry then! Fast forward to 1913. The Sixteenth Amendment, granting Congress the power to tax income, led to the rebirth of our friend, the Internal Revenue Service, initially as the Bureau of Internal Revenue. The first 1040 forms were introduced. No taxes were collected that year. The IRS focused on verifying the accuracy of the forms, a monumental task that prompted a massive restructuring. The Internal Revenue Service, throughout its history, has been tasked with surprising duties. During Prohibition, the IRS even enforced laws related to alcohol sales, a responsibility later transferred to the Department of Justice. Think about that the next time you raise a glass! Through world wars, economic booms and busts, the Internal Revenue Service has evolved. It adapted to the changing times, embracing computerization and, eventually, electronic filing. It even weathered scandals and political controversies, continuing its mission to collect the nation’s taxes. Here at the Internal Revenue Service in Philadelphia, a significant piece of this vast and complex system hums along. Remember, the Internal Revenue Service’s history is interwoven with the history of our nation, funding everything from education to national defense. It’s a reminder that even the most mundane tasks can have a rich and often surprising story behind them.