The Internal Revenue Service, known by its acronym, IRS, is the leading tax agency of the State. This agency is in charge of controlling the taxes of each one of the citizens and foreigners residing in the United States.
The IRS also administers the Internal Revenue Code. Specifically, it is the Federal Government’s regulatory body for tax legislation. As its extensive presence, here we tell you how many offices does the IRS have?
A brief history of the IRS
We already know what this government agency does, but where does it come from, and in what year was it created? The beginnings date back to the Civil War and one of the most influential presidents in the country, Abraham Lincoln. He and the Congress of the time created 1862 what we know today as the IRS.
Of course, at that time, it was a position, that is, a position within his Government, which was that of Commissioner of Internal Revenue. This person was to be in charge of taxing the expenses caused by the war.
After decades of back and forth over the income tax, in the 1950s, the tax agency reappeared with a clearer and more precise function. And it was then that its name was the one it has today.
IRS Divisions and Main Offices
The regulatory entity in charge of tax control at the federal level is divided into four broadly defined divisions. These are:
- Large Business and International
- Small Business/Self-Employed
- Wage and Investment
- Tax-Exempt and Government Entities
In addition to the sectors just mentioned, the IRS has other offices which carry out specific tasks:
- Equity, Diversity, and Inclusion
- Office of Chief Counsel
- Appeals
- Communications and Liaison
- Criminal Investigation
- Office of Fraud Enforcement At-a-Glance
- Office of Professional Responsibility (OPR)
- Office of Promoter Investigations
- Privacy, Governmental Liaison, and Disclosure
- Appeals
- Communications and Liaison
- Criminal Investigation
- Procurement
- Return Preparer Office
- Taxpayer Experience Office
- Whistleblower Office
How many main offices does the IRS have in the U.S.?
As there are several information processing centers, there are mainly 5 centers which are located at:
- Austin, Texas
- Kansas City, Missouri
- Cincinnati, Ohio
- Odgen, Utah
- Fresno, California
However, the primary IRS headquartered is located in Washington, D.C. On the other hand, tax return processing occurs mainly in 3 centers: Austin, Kansas City, and Odgen.
Of course, there are many more IRS offices within the above sectors. For example, Facilities Management & Security Services (FMSS) has over 600 locations nationwide.
How does the IRS in the U.S. differ from the IRS in other countries?
Although there are logical differences at the level of protagonism, presence, and mechanisms, other countries also have an organization to keep order and record all citizens’ taxes.
Likewise, the differences are more negative than positive, for example. In a 2017 Organization for Economic Cooperation and Development (OECD) report, the United States ranked 31st out of 35 countries in terms of its tax legislation.
This was because the U.S. state has (still) one of the highest corporate tax rates in the world (39.1% for that year). In addition, the U.S. tax system differs from others because it has a worldwide tax system. In addition to this, other taxes are applied to property, and capital gains, among others, which seem to be poorly structured, affecting society.
Countries such as Estonia ranked first in the report, have one of the best tax systems. This is because its system is highly developed due to its “competitiveness” model. The tax rate for individuals and companies is very low: 21%. In addition, in Estonia, only the value of land is taxed, not the value of structures or buildings.
Countries that have a better tax system than the United States
In addition to Estonia, New Zealand has an “Inland Revenue Department” that collects taxes for the Government of the Oceanic country. Here the national taxes are based on each inhabitant’s work/business and personal income, as well as the income necessary to pay for services and food.
Some entities, such as the Customs Service, collect a tariff on different goods and services, among which alcohol is the most important. The local Government also collects local taxes on property, but not on land or social security, which is highly beneficial.
Sweden, a similar striking case in terms of taxation
Although both countries have similar tax systems, notable differences place the Scandinavian country above the American one. Among them are:
- Income taxes are high, but you don’t pay for your education
It should be noted that income taxes are higher than in the U.S. However, college is “free,” and students get a housing allowance. There is a 56% tax rate, but the reality is that only 15% of Swedes pay this fee.
Those who pay this tax are high-income earners. The average Swede pays less than 27% (approximately) in taxes, but society gets something for it. In other words, a student does not finish university with high debts at the expense of student loans, etc.
- Tax forms in Sweden are now complete
One of the biggest problems for Americans is when they must file their taxes. It is not easy at all. Many people even hire tax specialists to file their tax returns correctly. Sometimes, you may also wonder how long does an IRS audit take.
In Sweden, on the other hand, the completed tax form is sent to the taxpayer’s home address. If everything is in order, they are signed and returned as they arrive. At skatteverketoppettider.se you can find all the Swedish tax offices.
- No property tax
In 2006, the Government drafted legislation to eliminate the property tax. It was replaced by a flat property tax of about $825 (per dwelling). The amount is the same for anyone who owns the property. In contrast, this is one of the highest taxes Americans must pay.
Are there any silver linings to the U.S. tax system?
Yes, there are some silver linings from the IRS. For example, according to the OECD report referenced above, the U.S. is the only country that collects 17% of federal tax revenue from sales and consumption taxes.
More clearly, on average, the countries that were part of the analysis collect 33% of their citizens’ income through similar taxes or value-added tax (VAT).
References
- Pomerleau, K. (2023) House GOP Blueprint and international tax competitiveness index, Tax Foundation. Available at: https://taxfoundation.org/grading-house-gop-blueprint-international-tax-competitiveness-index/.
- Our business divisions (2023) IRS Careers. Available at: https://www.jobs.irs.gov/about-us/who-irs/our-business-divisions.
- Heberlein, T. (2016) I’m an American living in Sweden. here’s why I came to embrace the higher taxes., Vox. Vox. Available at: https://www.vox.com/2016/4/8/11380356/swedish-taxes-love.