IRS History Timeline

1765-1776 Taxes and Revolution
Taxation without representation was the seed of the American Revolution. Colonists rebelled 
against Britain’s punitive taxes because they had no voice in parliament. On July 4, 1776, the Declaration of Independence severed ties with England. The Revolutionary War ended in 1783, and a new nation was born.

 

1787-1789 Evolution of Taxation
This tax was introduced in Ancient Rome. Back then, human urine was viewed as a valuable commodity.

It had many uses: tanning, laundering, and even teeth brushing. It started after entrepreneur types were discovered to be collecting the liquid waste. Both Emperors - Nero and Vespasian - noticed this and levied a tax on it’s purchase. It’s widely believed that this led to the popular Latin phrase Pecunia non olet, i.e. ‘money does not stink’.

 

1794 The Whiskey Rebellion

1794 saw the first outright challenge to the U.S. government’s revenue laws when a federal court summoned 75 distillers in western Pennsylvania to appear in court and explain why they shouldn’t  be arrested for whiskey tax evasion. The Whiskey Rebellion set up a clash between citizens and federal officers. The federal government prevailed, but at a cost of $1.5 million to American taxpayers.

 

1812-1817 The War of 1812

To pay for the War of 1812, Congress passed new internal taxes on refined sugar, carriages, distillers and auction sales and reinstated the Commissioner of the Revenue to collect them. On August 24, 1814, the British burned the Treasury building in Washington, D.C. On December 23, 1817, Congress repealed these and all remaining internal taxes and abolished the position of the Commissioner of the Revenue and all offices to collect them

 

1836-1842 The Treasury Gets a New Home

Construction began on a new Treasury building in 1836. The first segment opened in 1842.

 

1862 Civil War Expenses

On July 1, 1862, President Lincoln signed the second revenue measure of the Civil War into law. This law levied internal taxes and established a permanent internal tax system. Congress established the Office of the Commissioner of Internal Revenue under the Department of the Treasury. On July 17, 1862, George S. Boutwell became its first commissioner.

 

1863-1864 Property Seizures and Tax Refunds

In its first year, 1863, the Office of the Commissioner of Internal Revenue collected $39.1 million. The Revenue Act of June 30, 1864, authorized the Commissioner of Internal Revenue to compromise all suits “relating to internal revenue,” to abate outstanding assessments and to refund taxes subject to current regulations.

 

1867 State-of-the-Art Technology

In February 1867, the Secretary of the Treasury adopted a hydrometer to establish a uniform system to inspect and gauge alcoholic spirits subject to tax. The March 1, 1867 Revenue Act authorized the Secretary of the Treasury to adopt, procure and prescribe these and other weighing and gauging instruments to prevent and detect fraud by spirit distillers.

 

1870 Personal Privacy

Representative (later president) James Garfield of Ohio spearheaded an effort to make tax information private. On April 5, 1870, IRS Commissioner Delano forbade tax assessors from furnishing lists of taxpayers for publication. On July 14, 1870, Congress passed a revenue act stating, “no collector … shall permit to be published in any manner such income returns or any part thereof, except such general statistics …

 

1913 First Federal Income Tax

On February 25, 1913, the 16th Amendment officially became part of the Constitution, granting Congress constitutional authority to levy taxes on corporate and individual income. The Bureau of Internal Revenue established a Personal Income Tax Division and Correspondence Unit to answer a flood of questions about its enforcement, and a special division within General Counsel to prepare opinions interpreting internal revenue laws.

 

November 18, 2021 | IRS | DWHuff Consulting

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