How the Internal Revenue Service Works Part 1

The primary mission of the Internal Revenue Service is to enforce compliance with the Internal Revenue Code. Read that as make you file your tax return.

Collecting money from taxpayers is secondary to enforcing compliance. In fact, IRS employees look upon their jobs as law enforcement positions.

The great majority of money collected by the Internal Revenue Service is paid voluntarily through payroll deduction, quarterly estimates, and tax returns.

When the IRS does not receive a tax return from a taxpayer who has reported income requiring a tax return, one of the computer systems will flag it for action. For a non-filer, this is the beginning of the enforced collection program. The system will calculate a theoretical 1040 return assuming single or married filing separately status, no dependents, and no expenses. The taxpayer will be given credit for tax withheld or otherwise paid. If there is no balance due on the tax return, that is the end of the process unless the taxpayer has later issues. If there is a balance due the process moves to the next step which is correspondence requesting the tax return. Eventually, if no return is received, the IRS will prepare a “Substitute for Return” and proceed with collection action on that assessment.