Sam Brotman, JD, LLM, MBA July 2, 2020 31 min read

The Current Organization of the IRS


Sam Brotman, JD, LLM, MBA

Owner and Director of Legal
Brotman Law

The IRS Restructuring and Reform Act of 1998 triggered a comprehensive reorganization of the IRS, which modernized the Service and made it closer to being run like a private sector organization. As such, the IRS organization is led by the Commissioner serving as the chief official, the Chief of Staff and the Deputy Chief of Staff in the executive leadership roles below, and a number of “specialized IRS units” that serve different functions. [1] 

Staff members from each of these multiple units report to the Commissioner within the IRS Organization. Here is a list of the specialized units within the IRS Organization that report directly to the Commissioner. [2]

  • Appeals
  • Communications and Liaison
  • Office of Compliance Analytics
  • Equity, Diversity and Inclusion
  • Office of Research, Analysis, and Statistics
  • National Taxpayer Advocate
  • Chief Counsel [3]
  • Operations Support
  • Services and Enforcement

Perhaps of most interest within the IRS organization from a tax resolution standpoint is the Services and Enforcement Unit. The Deputy Commissioner for Services and Enforcement reports to the Commissioner and oversees four operating divisions and related service and enforcement functions. 

The following represents a list of entities and units for which the deputy is responsible:

  • Wage and Investment Division
  • Large Business and International Division
  • Small Business/Self-Employed Division
  • Tax Exempt and Government Entities Division
  • Criminal Investigation
  • Return Preparer Office
  • Office of Professional Responsibility
  • Office of Online Services
  • Whistleblower Office

Another key official within the IRS organization is the Deputy Commissioner for Operations Support, who also reports directly to the Commissioner. The deputy commissioner is responsible for overseeing integrated IRS organizational support functions and facilitating better business practices within the Service. 

The following list of units report directly to the deputy commissioner:

  • Chief Technology Officer
  • Agency-Wide Shared Services
  • Human Capital Officer
  • Chief Financial Officer
  • Office Privacy, Governmental Liaison and Disclosure

The IRS achieves many functions through one or more specialized units, the IRS publishes tax forms, collects revenues, issues administrative rulings [4], publishes the Internal Revenue Bulletin and undergoes the formal regulation process of rulemaking by publishing a Notice of Proposed Rulemaking (NPRM)

The organization of the modernized IRS is separated into divisions and specialized units responsible for managing the agency as well as for protecting the public interest. It is by understanding these different units and their functions that we get a sense of how the modern IRS functions and the roles that it has.

[1] For more information, please see’s-IRS-Organization

[2] As of this post, the Commissioner is Steven T. Miller, Acting.

[3] On matters of tax litigation, legal interpretation of the law, and tax policy, the Chief Counsel reports also to the General Counsel of the Treasury Department.

[4] Administrative rulings fall under two primary categories: revenue rulings and private letter rulings. A revenue ruling is where the IRS applies the law to a factual situation; the ruling is typically relied upon as a precedent for and by all taxpayers. On the other hand, a private letter ruling is a situation in which a taxpayer may seek the advice of the IRS with respect to the proper tax treatment of a transaction; the private letter ruling binds both the IRS and the requesting taxpayer. It is not cited or relied upon as a precedent similar to the revenue ruling.

IRS Appeals Office

The IRS Appeals Office is responsible for resolving tax controversies between the taxpayer and the other functions without the taxpayer having to resort to litigation. Appeals will normally get involved in a case (upon taxpayer petition) after the completion of an audit, when collection action is being threatened, or when a proposed Offer in Compromise has been rejected. 

The stated mission of the IRS Appeals Office is to “resolve tax controversies, without litigation, on a basis which is fair and impartial to both the government and the taxpayer in a manner that will enhance voluntary compliance and public confidence in the integrity and efficiency of the Service.”[1] IRS Appeals officers are charged with applying their knowledge of tax law, policy, and the general Internal Revenue Code fairly and accurately.

The IRS Appeals process begins when a taxpayer initiates and files a petition in response to an IRS determination. Oftentimes, the taxpayer’s matter will go directly into the IRS Appeals Office’s caseload. However, if a taxpayer files a petition in U.S. Tax Court, the taxpayer (or their representative) will be given the option of taking their matter to appeals first. In either circumstance, the IRS Appeals Office will conduct a review of the determination previously made by IRS Examination or IRS Collections. The IRS Appeals officer will review all pertinent information, including the taxpayer’s previous case file.

The IRS Appeals Office has powers in addition to arbitrating matters between the taxpayer and the IRS. These include reopening a closed case as well as raising new issues that require investigation. The IRS Appeals Office tends to re-open cases that are substantial and especially when it believes that tax liability is material. 

Therefore, taxpayers need to be cautious about statements made to the appeals officer, especially those that may provide damaging information about the taxpayer and/or their position. False statements given to the IRS appeals officer are also taken very seriously and all statements made are subject to the penalty of perjury (which carries potential jail time) if found to be untrue.

The IRS Appeals process usually begins with a conference between the taxpayer (and/or their representative) and the IRS Appeals Officer. Here, it is important to note that when appealing, only certified public accountants, enrolled agents and attorneys are allowed to represent taxpayers before the IRS Appeals Office. 

Some appeals officers prefer to have a preliminary phone conference with the taxpayer prior to the formal appeals conference and determination. This is preferable for the taxpayer because it gives them the opportunity to state their side of the case, which the appeals officer might not be aware of, and gather any additional substantiating documentation that the appeals officer is going to request. 

The IRS appeals officer will then weigh all the facts and legal arguments in a formal appeals conference, which may be either over the phone or in person. The appeals process ends when the appeals office determines whether to settle a claim. 

The decision following the appeals process represents a final determination with regard to the taxpayer’s tax liability. If the taxpayer is unsatisfied with the result determined by the IRS Appeals Office, they must take legal action against the IRS, either in U.S. Tax Court, U.S. Federal District or Court or the U.S. Court of Claims.

[1] See, “Appeals . . . Resolving Tax Disputes,” 4/22/2013.

The IRS Wage and Investment Division

The IRS Wage and Investment Division handles roughly 90 million tax returns for individual and married taxpayers. The IRS Wage and Investment Division primarily works with taxpayers that fall under a particular tax profile. Taxpayers who receive W-2 wages, who are employees, and who pay their taxes through withholdings generally fall within the profile that the IRS Wage and Investment Division is responsible for helping.

Most taxpayers who contact this division do not do so more than once a year. Finally, many taxpayers associated with the IRS Wage and Investment Division will receive a refund as a result of excess withholdings. The IRS collects third-party information from these taxpayers in the form of W2s filed by their employers and information taken from banks, brokerage houses and other third parties.

When it comes to administration and ensuring compliance, the IRS Wage and Investment Division’s primary purpose to make sure that returns are prepared correctly. The main tool used by the division to check this is by matching the information contained on an individual taxpayer’s return with that information that is provided by third parties. 

The division also rechecks taxpayer returns to ensure that credits and deductions have been properly claimed and that income information has been properly reported to the IRS. Any misstatements to the Wage and Investment Division are handled through a CP-2000 letter, which notifies the taxpayer that the information provided on the return does not match the information that the IRS has on file as well as listing any changes that the IRS proposes to make to an individual return.

The IRS Wage and Investment Division headquarters office provides strategic and operational direction, which includes managing internal support processes. “The Headquarters Operations and functional operations work together to manage the full cycle of interaction with W&I customers. They have the authority, responsibility, and expertise to oversee current operations and improve business practices and strategies.” [1]

  • Key Operations within the Wage and Investment Division include: Strategy and Finance; Equity, Diversity and Inclusion; Communications and Liaison; Return Integrity and Correspondence Services; and Office of Program Coordination and Integration.
  • Key Offices include: Customer Assistance, Relationships and Education (CARE); Customer Account Services (CAS); Compliance; and Return Integrity and Correspondence Services (RICS). Each office is responsible for providing support and assistance to customers; processing submissions and payments; assisting taxpayers in fulfilling their tax obligations; and working in partnership to carry out strategies that help to strengthen revenue protection.
  • Key Locations are in: Andover, Maryland; Atlanta, Georgia; Austin, Texas; Fresno, California and Kansas City, Missouri. The other three centers for individual returns are Brookhaven, New York; Memphis, Tennessee and Philadelphia, Pennsylvania.

[1] See

The IRS Small Business Self-Employed Division

The IRS Small Business Self-Employed Division oversees taxpayers and their issues that fall under one or both of these categories. The IRS Small Business Self-Employed Division helps taxpayers meet their tax obligations by administering the Internal Revenue Code and applying tax law with “fairness and integrity,” according to the IRS mission statements. 

Taxpayer profiles that fall under the IRS Small Business Self Employed Division include 57 million taxpayers, 41 million self-employed persons; and “nine million small businesses with assets of less than $10 million.” [1] 

An additional profile includes seven million filers of “employment, excise, and estate and gift returns.” [2] According to the IRS, the strategic priorities of the IRS Small Business/Self-Employed division address three types of tax gaps:

  • Underreporting Tax Gap: Taxes not collected due to taxpayer underreporting of their actual tax obligations
  • Underpayment Tax Gap: Taxes not collected due to taxpayer underpayment of their actual tax obligations
  • Non-filing Tax Gap: Taxes not collected due to taxpayer non-filing or otherwise not meeting their filing obligations.

The IRS Small Business Self-Employed Division’s purpose is also to improve service and business processes, reduce burden, develop human capital and address strategies that help to promote productivity and improve employee engagement.

The IRS Small Business Self-Employed Division serves this taxpayer profile[3] through the following five organizations:

  • Collection: This organization collects delinquent taxes and secures delinquent tax returns.
  • Compliance Services Campus Operations: The division oversees the tax compliance activities of the following campuses: Brookhaven, Philadelphia, Cincinnati, Memphis and Ogden.
  • Examination: The purpose of the Examination Division is to help the taxpayer under this profile understand their tax responsibilities. The division applies tax law with integrity and fairness. The application of tax law is conducted through Field and Office Audit examinations.
  • Specialty Taxes: Under this division, there are four market segments the SB/SE division caters to:
  • Employment Tax
  • Excise Tax
  • Estate and Gift Tax
  • International Tax
  • Communications and Stakeholder Outreach (CSO): The mission of CSO is to “deliver integrated strategic communications and educational products to employees and taxpayers…” The CSO also coordinates tax administration activities between practitioners and industry groups.

These five organizations serve small businesses (start-up and part-time), small businesses with employees, small businesses without employees, taxpayers with rental properties, taxpayers with farming businesses, individuals investing in businesses, which may include both partnerships and S-Corps; corporations, S-Corporations, and partnerships with assets under $10 million, and 55 million other customers.

[1] See:, “The IRS Small Business Self-Employed Division At-a-Glance,” 4/21/2013

[2] See:

[3] The IRS Small Business/Self-Employed Division serves individuals filing Form 1040 (U.S. Individual Income Tax Return), Schedules C, E, F or Form 2106 (Employee Business Expenses).


The IRS Tax Exempt and Government Entities Division

Established in 1999[1], the Tax Exempt and Government Entities Division protects the public interest by applying tax fairly and provides quality service to customers by helping them understand and comply with applicable tax laws.[2] The Tax Exempt and Government Entities Division serves a customer profile that ranges from small community organizations and municipalities to universities, huge pension funds, state governments, and participants of tax exempt bond transactions.[3] 

The division’s customer profile also includes those taxpayers that “pay more than $220 billion in employment tax and income tax withholding and control $8.2 trillion in assets.” [4] The division also works with employee plans, exempt organizations, and government entities.

The strategic priorities of the IRS Tax Exempt and Government Entities Division include strengthening enforcement activities; advancing the public interest; fostering proactive partnerships; enhancing customer satisfaction; and promoting self-guidance and self-assistance, which may or may not include self-correction. The IRS Tax Exempt and Government Entities Division employs a diverse, motivated workforce.

The customer profile for the IRS Tax Exempt and Government Entities Division represents the following. The division serves the need of three customer segments: Employee Plans, Exempt Organizations, and Government Entities.

  • Three million customers ranging from small local community organizations and municipalities to major universities, state governments and huge pension funds
  • Customers under this profile pay more than $220 billion in employment and income tax withholding.
  • Customers control more than $8.2 trillion in assets.
  • Exempt organizations represent approximately 1.6 million tax exempt organizations, which include religious organizations.
  • Government Entities taxpayers hold tax exempt bonds with a total value of $1.8 trillion.

The IRS Tax Exempt and Government Entities Division taxpayer profile is extended to include 88,000 federal state, and local entities as well as 550 federally-recognized Indian tribes ( The division addresses four basic key customer needs, which include the following:

  • Education and communication
  • Rulings and agreements
  • Examination
  • Customer account services

Education and communication efforts focus on helping taxpayers understand their tax responsibilities. Efforts include outreach programs and activities. Rulings and agreements are specific to up-front compliance programs, which include determination, voluntary compliance, and private letter ruling programs. 

Examination initiatives “address non-compliance, through customized activities within each customer segment” ( Lastly, Customer Account Services provide accurate and timely responses to questions, requests, and concerns for information from taxpayers.

The Commissioner of the IRS Tax Exempt and Government Entities Division monitors the uniform interpretation and application of federal tax laws, providing advice and assistance through the Internal Revenue Service (“Service”), the Department of the Treasury, government agencies, Congressional committees, and state governments.

With this in mind, the IRS Tax Exempt and Government Entities Division is comprised of three business divisions: Employee Plans (EP); Exempt Organizations (EO); and Government Entities (GE). 

Activities under the EP division include employee plans[5], tax treatment of participants and their beneficiaries, and deductions for employer contributions and administrative provisions. The mission of the EO is to protect the public interest by applying tax laws fairly. 

Exempt organizations include the following:

  • Organizations exempt under IRC 501[i]
  • Political organizations[6] described in IRC 527
  • Organizations described in IRC 4947(a)[ii]
  • Prepaid legal plans[7] described in IRC 120
  • Welfare benefit funds described in IRC 4976

Lastly, government entities, or GEs, also serves to protect the public interest. References to government entities include federal, state, and local governments, Indian tribal governments, and tax-exempt bonds.

[1] The TE/GE Division was established as part of a modernization initiative, replacing the former Assistant Commissioner (Employee Plans and Exempt Organizations) function (, “Tax Exempt & Government Entities Division At-a-Glance,” 4/21/2013).

[2] See

[3] (, “Tax Exempt & Government Entities Division At-a-Glance,” 9/8/2013).

[4] Id.

[5] According to the Tax Exempt & Government Entities Division of the IRS, employee plans include the following: qualification of pension, annuity, profit-sharing, stock bonus plans, individual retirement arrangements, simplified employee pensions, saving incentive match plans for employees, tax sheltered annuities, and IRC 457 plans (, “Tax Exempt & Government Entities Division At-a-Glance,” 4/21/2013).

[6] According to tax law, a political organization is defined as “a party, committee, association, fund, or other organization (whether or not incorporated) organized and operated primarily for the purpose of directly or indirectly accepting contributions or making expenditures, or both, for an ‘exempt function’” (Internal Revenue Manual, “ – Political Organizations,” 4/21/2013).

[7] Prepaid legal plans are also known as “group legal services plan.”

[i] List of exempt organizations include: corporation organized under Act of Congress; corporations organized for exclusive purpose of holding title to property, collecting income, and turning over entire amount to an organization which is also exempt; corporations, community chest, fund, foundation operating exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes; civil leagues; labor, agricultural, or horticultural organizations; business leagues, chambers of commerce, real-estate boards, boards of trade, or professional football leagues; clubs organized for pleasure, recreation, and related non-profitable purposes; and fraternal beneficiary societies, orders, or associations. The listing of organizations is not comprehensive. You may view additional categories via the Legal Information Institute housed on the Cornell University Law School campus:

[ii] According to the Internal Revenue Manual, an example of this type of organization is a nonexempt charitable trust. “A trust is described in IRC 4947(a)(1) if it: has exclusively charitable interests, and is a trust for which a charitable deduction is allowed. [It] is an estate in unduly prolonged administration or a trust . . .” (IRM, “7.26..15.2 – Nonexempt Charitable Trusts,” 4/21/2013).

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Last updated: May 18, 2024

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Sam Brotman, JD, LLM, MBA

Owner and Director of Legal
Brotman Law



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