As April 15 rolls around each year and the tax deadline looms, hundreds of millions of Americans obsess about one organization: the IRS. And generally speaking, those obsessive thoughts aren’t positive. According to a 2015 poll published by the Pew Research Center, just 42% of the American public held a favorable review of the organization and ranked it 16th out of 17 federal agencies.
It’s easy to understand why the Internal Revenue Service is so unpopular, but, as with regular trips to the dentist, a willingness to follow the rules can produce less painful results. Furthermore, a brush with the IRS isn’t always bad, as evidenced by the $736.2 billion in refunds the agency issued during the 2020 fiscal year. (Note: In 2022, the deadline to file taxes is April 18 or 19 depending on which state you live in due to various federal holidays.)
Here are six facts about the tax organization.
Its Predecessor Emerged During the Civil War
After 70-plus years of relying on tariffs to raise money, the war-torn U.S. government established a temporary income tax with the Revenue Acts of 1861 and 1862. The latter called for a 3% tax on earnings from $600 to $10,000 and a 5% tax on anything higher. The act also established the office of the Commissioner of Internal Revenue to enforce the law. The office undertook additional responsibilities in 1913 with the ratification of the 16th Amendment, which made income tax a permanent feature of American lives. In 1953, the office was reformulated into the modern-day IRS.
Donald Duck Briefly Served as a Spokesman
With the country again facing wartime shortages, in late 1941, the Treasury Department enlisted Walt Disney to help ease the rollout of expansive tax programs. Happy to assist Uncle Sam, Disney got his animators cracking on a seven-minute short titled The New Spirit, which featured Donald Duck dutifully filling out his tax forms. The New Spirit earned an Oscar nomination for Best Documentary, so naturally, a sequel, The Spirit of '43, went into production in time for the next tax season. As for why the shorts featured the irascible Donald, he was the franchise's most popular character at the time, with Disney likening his value to that of MGM loaning out Clark Gable for public service announcements.
The Bureau Was Charged With Enforcing Prohibition
The January 1919 ratification of the 18th Amendment and near-simultaneous passage of the Volstead Act — which prohibited the manufacturing and sale of alcohol — meant that enforcement of the country's polarizing prohibition laws fell to the guys who thought they were hired to crunch numbers. In 1930, the task was mercifully shifted to the Department of Justice, but it was kicked back to the IRS, under the jurisdiction of the new Alcohol Tax Unit (ATU), after Prohibition was repealed in 1933. The ATU eventually took charge of firearm- and tobacco-related revenues until the enterprise was spun off into the Bureau of Alcohol, Tobacco, and Firearms in 1972.
A Former Commissioner Was Convicted of Tax Evasion
The post-World War II years marked one of the lowest points in the bureau's history, as at least 20 officials were indicted for accepting bribes and other crimes in the early 1950s. The corruption went all the way to the top, as former Commissioner Joseph Nunan Jr. was charged with evading $91,086 in taxes, including the amount owed for successfully wagering that Harry S. Truman would win the presidency in 1948. Nunan reportedly claimed that he "never held [himself] out to be a tax expert," and that he didn't report the Truman winnings because they were offset by gambling losses, a line of defense that failed to sway jurors and resulted in a five-year prison sentence.
Commissioners Are Limited to Five-Year Terms
While the 1950s scandals pushed the IRS away from the old-fashioned patronage system, its top dog remained subject to presidential appointment and Senate approval. The commissioner also enjoyed the freedom of no term limitations until the passage of the IRS Restructuring and Reform Act of 1998 capped a term at five years. Depression-era boss Guy T. Helvering holds the record for longest tenure at 10 years and four months since he sat at the helm way before the act was passed. Current Commissioner Charles P. Rettig’s term will expire in November 2022.
The First E-File Program Was Launched in 1986
Bogged down by ever-increasing loads of paperwork, the IRS embarked on a test run of its Electronic Filing System (EFS) in 1986. The cutting-edge program involved five tax preparers calling one of three service centers, where the phone would be connected to a modem with a tape drive, and the data then converted on a super mini-computer. The process was laborious as well as limited — only returns that were due refunds were used — but the program was successful enough to expand to centers in seven cities the following year, en route to a nationwide launch in 1990.