History of the IRS

In 1862 President Lincoln and Congress created the position of commissioner of Internal Revenue and enacted an income tax to pay war expenses. The income tax was repealed 10 years later. In 1894 Congress revived the income tax , but the Supreme Court ruled it unconstitutional the following year.

16th Amendment
In 1913, Wyoming ratified the 16th Amendment, providing the three-quarter majority of states necessary to amend the Constitution. The 16th Amendment gave Congress the authority to enact an income tax. That same year, the first Form 1040 appeared after Congress levied a 1 percent tax on net personal incomes above $3,000 with a 6 percent surtax on incomes of more than $500,000.

In 1918, during World War I, the top rate of the income tax rose to 77 percent to help finance the war effort. It dropped sharply in the post-war years, down to 24 percent in 1929, and rose again during the Depression. During World War II, Congress introduced payroll withholding and quarterly tax payments.


The agency was reorganized in the 50s. The Bureau of Internal Revenue name was changed to the Internal Revenue Service.

The IRS Restructuring and Reform Act of 1998 made many changes.