THE STRUCTURE OF THE IRS

The IRS is part of the Treasury Department and is headed by the Commissioner of the Internal Revenue Service. The IRS is organized by operating divisions. There are four major operating divisions.

Wage and Investment Income Division

Wage and Investment Income Division (W&I): W&I covers individual taxpayers, including those who file jointly, who receive wage and/or investment income. If you are wage earner and have a tax liability, the IRS could garnish your wages or levy your bank accounts. See our IRS installment agreements practice area regarding more information if you have a tax liability and are a wage earner.

As far as IRS audits and wage earners go, the IRS will check that the wages and sources of income that are reported on the tax return match what third parties have reported to the IRS, such as W-2s and statements pertaining to investment income. If there are any discrepancies, the IRS will conduct an audit. See our practice area regarding IRS audits for more information.

Small Business and Self Employed

Small business and Self-Employed Division (SB/SE): SB/SE covers self-employed individuals and small businesses, including corporations and partnerships with assets less than or equal to $10 million. Estate and gift taxpayers, fiduciary returns and all individuals who file international returns fall within this division as well. More information about the SB/SE division can be found here: https://www.irs.gov/businesses/small-businesses-self-employed

According to the IRS, noncompliance with tax reporting and payment is high for taxpayers in this category. Therefore, the IRS exerts a lot of resources to ensuring compliance for taxpayers who fall within this category. IRS audits and collections enforcement action are common.

In addition, taxpayers with an FBAR filing requirement can take advantage of the OVDP and streamlined disclosure programs if necessary.

Tax-Exempt Organizations and Governmental Entities Division

Tax-Exempt Organizations and Governmental Entities Division (TE/GE): The TE/GE division includes pension plans, exempt organizations and governmental entities. This group typically pays no income tax, but files payroll tax returns and pays employment taxes and income tax withholdings. If you have questions about tax-exempt audits, review our IRS tax exempt audit blog post.

Large Business and International Operating Division

Large Businesses and International Operating Division (LB&I): The LB&I division includes business with assets of over $10 million. Common issues for these taxpayers include tax law interpretation, accounting and the application of regulations.

Conclusion

If you have IRS tax help questions regarding the operating divisions of the IRS and how to resolve any particular IRS tax dispute, please contact a tax attorney at Disparte Tax Law for assistance.