Treasury Department is the executive body responsible for
administering the federal tax laws of the United States.
The Internal Revenue Service or IRS,
a division of the Treasury is charged with
collecting taxes and enforcing the Internal Revenue Code.
In this lesson, you will learn about the enforcement of federal tax laws,
more specifically you will examine various attributes of the IRS including its mission,
structure, and administrative powers.
You will also learn about the tax return audit process and the tax gap.
Code Section 7801 A1 states that the administration and enforcement
of this title shall be performed by or
under the supervision of the secretary of the Treasury.
Here of course the term title refers to Title 26 of the Code of Federal Regulations,
better known as the Internal Revenue Code.
Under the statutory authority to supervise the administration and enforcement of tax law,
the Treasury created the IRS for this purpose,
specifically Code Section 7803 provides for the appointment of
a Commissioner of Internal Revenue to administer, manage, conduct, direct,
and supervise the execution and application of
the Internal Revenue laws or related statutes and
tax conventions to which the United States is a party.
Therefore, the official mission of the IRS is to
provide America's taxpayers top quality service by
helping them understand and meet their tax responsibilities
and enforce the law with integrity and fairness to all.
Said another way, the IRS role is to help the large majority of
compliant taxpayers with the tax law while ensuring that the minority,
who are unwilling to comply pay their fair share.
To facilitate its mission,
the IRS provides taxpayers with information such as publications,
tax forms, and detailed instructions so that they can comply with income tax laws.
It also identifies and examines delinquent tax payments and performs
assessment and collection procedures under the restrictions of
due process and other constitutional guarantees.
One of the most renowned examples of IRS enforcement is that of
the legendary organized crime boss, Alphonse Scarface Capone.
After federal prosecutors attempted for many years to build criminal cases against him,
the accountants came to the rescue.
Specifically in 1931, the intelligence unit of the Internal Revenue Service
completed an investigation that led to
Capone's eventual conviction for federal tax evasion.
While he was seemingly able to create plausible deniability for his organized crimes,
hiding income wasn't as easy.
He spent 11 years in prison as a result.
If interested, you can review
interesting historical documents about this case on the IRS website.