The Internal Revenue Service (IRS), a bureau of the U.S. Treasury Department, is the federal agency charged with the administration of the tax laws passed by Congress.
Operations involving most taxpayers are carried out in district offices and service centers. District offices are organized into Resources Management, Examination, Collection, Taxpayer Service, Employee Plans and Exempt Organizations, and Criminal Investigation. All tax returns are filed with the service centers, where the IRS computer operations are located.
Prior to 1987, all tax return processing was performed by hand. In an attempt to improve the speed and efficiency of the manual processing procedure, the IRS began testing an electronic return filing system beginning with the filing of 1985 returns.
The two most significant results of the test were that refunds for the electronically filed returns were issued more quickly and the tax processing error rate was significantly lower when compared to paper returns. Electronic filing of individual income tax returns with refunds became an operational program in selected areas for the 1987 processing year.