🌱 Origin Series #8: The IRS - From War Funding to Audit Power “Where did the IRS even come from?”

It’s the three-letter agency that makes even billionaires nervous: the IRS.

But it wasn’t always this powerful.

Let’s rewind. 🎬

📜 The Beginning: A Tax to Fund War

The Internal Revenue Service was born in 1862— right in the middle of the Civil War.

President Lincoln needed a way to fund the Union Army.

Enter: America’s first income tax and a temporary Bureau of Internal Revenue.

(Yes—temporary. That aged well. 👀)

🏛️ The Power Grows: The 16th Amendment

Fast forward to 1913. The 16th Amendment is ratified.

Translation: Congress now has the constitutional power to tax income.

This wasn’t just a policy shift— it was a philosophical one.

The U.S. government now had a direct claim on individual and corporate earnings.

And the IRS? Its job was to enforce it.

💼 Today: Tech, Data & Enforcement

The IRS isn’t just a tax collector— it’s a massive data-driven institution with tools to match:

🔍 Algorithmic audit selection

🌐 International reporting systems (hi, Canadians)

💳 Third-party payment tracking

It doesn’t need to catch everything. Just enough to keep people honest.

🧠 So what’s the takeaway?

You can’t outmuscle the IRS.

But you can plan around it—with the right structure, strategy, and support.

Especially if you’re a Canadian doing business or investing in the U.S.—understanding what the IRS sees (and expects) is key to staying compliant and optimizing outcomes.