1931 – The IRS Intelligence Unit uses an undercover agent to gather evidence against AL CAPONE, one of the most notorious and feared gangsters in U.S. history. Though law enforcement officials had repeatedly brought Capone up on charges, his intimidation of witnesses and juries always allowed him to escape punishment. But the long arm of tax law would prove too strong. Capone was convicted of tax evasion and sent to prison.
1932 – The Revenue Act of 1932 raised the top tax bracket back up to 63% in response to the Great Depression.
1933 – Tax rate is at 63%. Prohibition is repealed. IRS again assumes responsibility for alcohol taxation the following year and for administering the National Firearms Act. Later, tobacco tax enforcement is added.
1940 – American involvement in World War II will lead to higher tax rates.
1942 – Tax rate goes up to 88%! The Revenue Act of 1942, hailed by President Franklin D. Roosevelt as “the greatest tax bill in American history,” passes Congress. It increases tax rates and the number of residents subjects to income tax. It also creates deductions for medical and investment expenses.
1943 – Congress passes The Current Tax Payment Act, which requires employers to withhold taxes from employees wages and remit them quarterly.
1945 – Tax rate is at 94%! More than 43 million Americans pay tax with annual receipts in excess of $45 Billion, up from $9 Billion in 1941.
1953 – The Bureau of Internal Revenue becomes The Internal Revenue Service.
1954 – The filing deadline for individual tax returns is changed from March 15 to April 15.