What is IRS?
IRS stands for Internal Revenue Service. IRS is Federal United States governmental agency that has the responsibility of collecting tax and also enforcing tax. It was established in 1862 by President Lincoln and works under the authority of the United States Department of the Treasury. It is fundamentally occupied with the gathering of individual income taxes and employment taxes. The IRS oversees and also administers the tax system of the U.S. The IRS requires that taxpayers comply with the tax laws without necessarily being compelled to by the actions of a federal agent. This implies that the taxpayer is the one to decide whether he or she will comply with the laws of not.
The IRS organization is being led by a commissioner, who’s based at the Internal Revenue Service (IRS) National Office located in the Washington, D.C. The president appoints the commissioner plus his or her chief counsel, and they must be approved by the Senate upon appointment. The chief counsel of IRS serves as chief legal adviser to the IRS. Regional commissioners oversee IRS operations in the four regions of the country.
The IRS is has the responsibility of enforcing Internal Revenue Code that codifies all the tax laws of the U.S. IRS is involved in, serving and educating the taxpayers; determines, assesses, and collects taxes; it investigates individuals and organizations who violate tax laws; it determines the pension plan qualifications and exempts group status; and also it issues rulings and regulations in order to supplement the Internal Revenue Code.
The IRS has the authority of collecting information regarding the U.S. citizens, companies in the U.S., and other institutions. All the taxpayers file tax returns yearly to the IRS. The returns contain detailed financial and personal information. The returns can either be filed through paper tax return or the e-file tax return. Filing tax returns earlier or in the required time is essential for the smooth running of the IRS.
The IRS has the ability of withholding income taxes that the employee owe the government automatically from their paychecks. The withholding requirement was imposed so that the government would increase their revenue. Automatic withholding enables the government to be able to receive a steady stream of tax revenue. Automatic withholding is crucial in enforcement of voluntary compliance from the taxpayers given that individual tax burden Is lessened as taxes owed to the government are subtracted from their individual paycheck before the check they receive the check.
The IRS has the responsibility of issuing tax refunds. Tax refund is administered when one’s paid taxes are in excess in a particular year than what he or she was supposed to pay. The Internal Revenue Service processes and gives tax refund to the individuals.
The IRS publishes tax forms that the taxpayers are supposed to select from and use them for calculation and reporting of their federal tax obligations. There are others forms that are published by the IRS for their own interns operation and are mostly used during initial income tax return processes.
The IRS gives administrative rulings that include revenue ruling and private later ruling. The controlling power of regulations and tax decisions allows the taxpayers to depend on them. A private letter arrangement is useful for any taxpayer to whom it is issued, and provides some clarification of the Service’s position on particular tax issue. A private letter ruling is relied upon by a taxpayer allows for the waiver of penalties for underpayment of tax.
The IRS conducts audits. The audits are authorized under Section 7602 of the Internal Revenue Code. The audit is a review of a taxpayer’s books and records to determine the tax liability and this may at times involve questioning other third parties.
Taxpayers are advised to use the e-file tax return filling system when making their returns. Taxpayers who use the e-file filling system makes complete, and accurate returns and in case they are supposed to receive a tax refund from the IRS the refund is processed within a short time interval.