IRS Tax Info 2008

Internal Revenue Service or IRS is a government agency that administers the laws of internal revenue, computation and payment of tax interest. IRS reorganized its structure to meet the changing demands in 1998. As per the new structure of IRS, there are three levels.

• Commissioner
• Deputy Commissioner for services and enforcement
• Deputy Commissioner for operations support

All the IRS offices or units are supposed to report to the first or Commissioner Level. Deputy Commissioner for services and enforcement is supposed to deal with all the four primary operating divisions. It also looks after the enforcement functions and other service along with reporting to the Commissioner. As the name specifies, Deputy Commissioner for operations support helps to facilitate and increase efficiency of economy of scale. It helps to carry out better business practices and integrate various IRS support functions.

IRS deals in two types of interests, namely, credit interest and debit interest. Credit interest is the amount that IRS department owes to the taxpayer due to overpayment of taxes. Debit interest refers to the underpayment of tax amount or the amount in lieu of penalty or interest on penalty by the taxpayer.

Different interest rates are applicable on the credit and debit interest by the IRS. IRS may calculate simple, compound, normal, restricted, annual interest netting and net rate interest netting depending upon the type of interest to be paid in a unique case.

IRS considers various constraints for ascertaining IRS tax for an individual. Tax assessment for a single is different from that of a married person. If you have enrolled yourself in an Individual Retirement Arrangement or IRA plan then you can save upon some of your tax. New marriages, jobs, divorce, death, birth etc. all are considered while evaluating the tax of an individual.

Taxpayer is supposed to provide complete details of his or her assets, income and expenses so that tax upon his or her income can be determined. Failure to do so would result in penalties. Generally, we can say that it is vital to understand the tax structure of IRS to overcome any such difficulties.