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Internal Revenue Service Pros And Cons

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The Internal Revenue Service, more commonly known as the IRS and most commonly known as the least favored federal agency, was first established during the years of the Civil War to collect taxes levied to support the war effort in the North. During this time, the revenue bureau was meant to be temporary and the tax expired in 1872. However, the Commissioner of Internal Revenue and its successor continued past the expiration date and stayed in effect up to present day in America. The national income tax in place today was not always a part of the American taxing system, with the exception of 1894. Congress passed a national income tax, but it was ruled unconstitutional in 1895 by the Supreme Court decision in Polluck v. Farmers’ Loan and Trust …show more content…

President Donald Trump and his administration have announced their plan to cut the IRS’s budget in order to move funding toward reducing financial crime, terrorism financing and economic threats. Meanwhile, Treasury Secretary Steven Mnuchin, alongside others, warn against this particular budget cut claiming that it will only deepen the crisis the IRS is currently facing. In the 2016 budget, the IRS received $11.2 billion dollars from Congress. This amount of funding has declined by 17 percent from 2010 according to an article published by the Center on Budget and Policy Priorities. The decline in funding has forced the IRS to reduce its staff. In 2010, 94,600 staff members worked as agents and officials for the IRS, and in 2017, the list of employees shrank by 14 percent to 81,600 staff members. Those opposed to Trump’s plan to cut IRS funding have developed the basis of their argument around the reasoning that if the budget and number of employees were to decrease less money would be collected and taxpayer services would be even more difficult to manage. Employees would be overwhelmed with an enormous amount of work that accompanies the effects of being understaffed. For example, according to the National Taxpayer Advocate Nina Olsen, “At one point during the filing season [in 2015] the level of service on the TPP line was below ten percent for …show more content…

The audit has been dragged out for over nearly a decade regarding Microsoft’s overseas subsidiaries, and an investigation was being conducted in regards to whether the Redmond company improperly moved software code worth billions of dollars offshore in a way that illegally evaded its U.S. tax bill. Under current law, corporate profits earned overseas and left overseas are not subject to taxation in America. The IRS spent years requesting documents and interviews with Microsoft employees regarding the investigation. In December of 2014, the IRS sued Microsoft in order to force them to turnover documents and information that the IRS claimed the company failed to provide in the investigation. Microsoft’s position in regards to the IRS is that they abused their federal power when they hired an outside law firm to aide them in auditing Microsoft. In 2014, the IRS decided to hire an outside law firm to discuss the case against Microsoft. The problem was that the law firm, Quinn Emanuel, had little experience handling taxpayer data, and in order for the firm to perform the audit, it needed the classified, secret tax documents that was provided by the IRS. However, according to current U.S. law, only employees of the IRS are authorized to view those files. In light of this, Microsoft asked that the information requested by the IRS should be thrown out

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