The administrative responsibility for income tax laws is assigned to the Treasury Department and within the department, to the IRS. The IRS commissioner is appointed by the president and is responsible for determining, assessing, and collecting internal revenue taxes and enforcing other provisions of the tax law.

The IRS has a national office in Washington, D.C., four regional offices, thirty-three district offices, and ten service centers. The national office is the headquarters of the commissioner of internal revenue and various deputy and associate commissioners. The four regional offices are each headed by a regional commissioner of internal revenue. The regional commissioners are responsible for the collection of income taxes, audit of returns, intelligence operations, and appellate procedures. Regional commissioners also supervise the work of the district directors within their regions.

IRS district officesIRS district officesFound in major U.S. cities, provide assistance to and audits of taxpayers. are located in every major city in the United States. District offices are responsible for various day-to-day operations such as providing information to taxpayers, auditing tax returns, and collecting taxes. Letter rulingsletter rulingsDescriptions of how IRS will treat a proposed transaction; requested and paid for by taxpayer; issued at the district office; only applies to requestor. are often issued by the district director.

In addition to the district and regional offices, the IRS currently maintains ten service centers. At these service centers, the Internal Revenue Service computers process the information from tax documents such as tax returns, payroll tax forms, Form 1099s, and withholding forms.

The IRS also maintains a National Computer Center in Martinsburg, West Virginia, where information from various service centers is matched with records from other service centers. This cross-matching of records helps to assure that taxpayers report all their income and do not file multiple refund claims.

The IRS Restructuring and Reform Act of 1998 created an independent oversight board. The board does not run the IRS’s day-to-day operation, but it has a strong say in IRS policy setting (e.g., strategic planning, modernization, training, and collection procedures). The board consists of six private-sector experts (appointed by the president with Senate approval), the Treasury secretary, the IRS commissioner, and an IRS employees’ representative.

A national taxpayer advocate not under IRS control, reporting directly to the Treasury secretary, was also created by the 1998 act. Instead of the old problem resolution system, the new law called for local taxpayer advocates operating independently of IRS examination, collection, and appeals functions (even to the point of having separate phone lines and fax machines).

Under the 1998 act, the IRS commissioner has a five-year term. To attract talent, the act also gave the commissioner the ability to appoint up to forty individuals for up to four years. The Office of Chief Inspector, responsible for internal audits of the IRS, was removed from the IRS and moved into the Treasury.