Quiz 15: Administrative Procedures

Business

A

The IRS is organized functionally into four divisions: (1) Wage and Investment, (2) Small Business, (3) Mid Market/Large Corporate, and (4) Tax Exempt. Each division is headed by a divisional director. The Wage and Investment Division is responsible for individual taxpayers who report only wage and inv income. Most of these taxpayers file Forms 1040, 1040A, or 1040EZ. The Small Business Division is respon sole proprietors, individuals with supplemental income, and small corporations and partnerships. Most of these taxpayers file Forms 1065 and 1120S or Schedules C, E, and F. The Middle Market/Large Corporate Division is responsible for corporations with assets of $5 million or more. Most of these taxpayers file Form 1120. The tax Exempt Division is responsible for tax- exempt organizations, employee plans, and state and local governments. Most of these entities file forms relating to tax exempt status. The shift to a functional mode of organization reflects Congress's desire to render the IRS more efficient an client- oriented. Through this mode of organization, tax administrators can focus on their areas of technical expertise, and taxpayers can deal with the same technical experts wherever they reside.

False