The origins of the IRS begin during the Civil War era. In 1862, President Lincoln along with Congress put an income tax into law, to help the North drive their war machine. 10 years later, the income tax was repealed, until congress revived it again in 1894. That following year, the Supreme Court ruled income tax unconstitutional.
In 1913, Wyoming ratified the 16th Amendment, providing the majority needed, to amend the constitution. The 16th Amendment allowed the government the authority to legally enforce the income tax. During that same year, Congress applied 1 percent tax on individuals with net incomes of $3,000 or more, giving birth to the first Form 1040. In addition, 6% surtax was placed on individuals with incomes in excess of $500,000.
During the first World War, the top rate of the income tax rose to 77 percent, in effort to finance the war effort. Following the post-war years, the income tax plummeted, down to 24 percent in 1929, and again increased during the Depression. At the time of the second World War, payroll withholding and quarterly tax payments, were enacted by Congress.
In the 1950s, the agency was reorganized to replace a patronage system with careers and professional employees. The Bureau of Internal Revenue name was changed to the Internal Revenue Service. The IRS commissioner and chief counsel are appointed by the president and confirmed by the Senate.