6 Things You Didn't Know About the IRS

It's been said that people who complain about having to pay taxes can be divided into two classes: men and women.

Realistically, taxpayers can be broken down into a few less broad categories. Nobody likes to pay taxes but most of us do. A few of us don't but really should be; the IRS has their eye on them. And I bet there is at least one person out there who loves paying taxes, most likely because they suffer from multiple concussions.

Whether you pay your taxes with a smile or a frown, here are six things you likely didn't know about the IRS.

Why and when was the Internal Revenue Service created?

The predecessor of the IRS can be traced back to 1862. President Lincoln signed into law the Revenue Act. This was the first time a progressive rate income tax was introduced to the country. Funds from the tax were used to support the Civil War.

The ruling taxed most household incomes over $600 at a flat three percent rate. Adjusted to current inflation, that would be the equivalent of taxing anyone whose income is over $13,259. Three percent of that is about $400.

What Constitutional Amendment allows for the collection of tax?

In 1913, as the threat of war loomed, Wyoming, the last among 36 states at that time, ratified the 16th Amendment. The amendment stated, "Congress shall have the power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several states, and without regard to any census or enumeration."

The passing of the 16th Amendment continues to be a popular point of contention among those who purport frivolous tax arguments. For those who are interested, the law and the court cases that debunked the notion that the Amendment was not ratified properly are available in section 1 of the IRS publication The Truth About Frivolous Tax Arguments.

When was the first Form 1040 rolled out?

The first 1040 tax return was created in 1913. The 1913 Form 1040 was a 4-page form, including all instructions, and allowed for such deductions as "shipwreck," a "reasonable allowance for wear and tear," and "worthless debts."

How much tax does the IRS collect?

According to the IRS web site, in fiscal year 2010 the IRS collected more than $2.3 trillion in revenue and processed more than 230 million tax returns. Additionally, the IRS spent just 53 cents for each $100 it collected last year. That's a pretty good return (no pun intended).

How much tax does the IRS fail to collect?

While $2.3 trillion is a lot of money, taxpayers should be paying much more. The "tax gap" refers to the amount of revenue the IRS collects each year compared to the amount of taxes actually owed. Current figures have the tax gap at approximately $350 billion in annual unpaid taxes.

Does the IRS use multi-media sources? You betcha. IRS launched IRS2Go, a smartphone application that lets you interact with the IRS using your mobile device. The app allows you to check on your refund and get IRS tax updates.

The IRS also has informational videos avaiable on YouTube. Twitter, podcasts and widgets are all used by the IRS as well.

For more information on these electronic platforms, visit the IRS News Media page.

More from this Contributor:

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What to do if the IRS intends on auditing you