Internal Revenue Service

Federal Income Tax

(c) Linda Haas Davenport

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The Internal Revenue Act of July 1, 1862 (12 stat. 432), was intended "to provide Internal Revenue to support the Government and to pay Interest of the Public Debt." Monthly specific and ad valorem duties were placed on manufactures, articles, and products ranging from ale to zinc. Monthly taxes were levied on the gross receipts of transportation companies, interest paid on bonds, surplus funds accumulated by financial institutions and insurance companies, gross receipts from auction sales, and on sales of slaughtered cattle, hogs, and sheep. Gross receipts from newspaper advertisements were subject to a quarterly tax. Annual licenses were required for trades and occupations, and annual duties were placed on carriages, yachts, billiard tables, and gold and silver plate.

An annual tax was also levied on income in excess of $600, and legacies and distributive shares of personal property were made taxable. Stamp duties were imposed on legal and business documents and on medicines, playing cards, and cosmetics.

The act authorized establishment of the Office of Commissioner of Internal Revenue in the Treasury Department to superintend the collection of taxes and duties and to prepare the regulations, instructions, directions, and forms used in assessing and collecting taxes.

The President of the United States was authorized by the act to divide, by Executive order, the States and territories into collection districts, but the number of districts was not to exceed the number of congressional Representatives from a State or territory. He also appointed an assessor and a collector for each district. The assessor then divided his district into divisions and assigned an assistant assessor for each division. The collectors appointed deputies who had authority to levy taxes and duties.

Persons, partnerships, firms, associations, or corporations submitted to the assistant assessor of their division a list showing amount of annual income, articles subject to the special tax or duty, and the quantity of goods made or sold that were to be charged with a specific or ad valorem tax or duty. The assistant assessors collected the lists and compiled in alphabetical order two lists: (1) name of persons residing in the division who were liable for taxation and (2) names of persons residing outside he division who owned property in it. Under each person's name was the value assessed, enumeration of taxable income or items, and the amount of duty or tax due. The lists were delivered to the district assessor, who examined them, corrected any errors, and approved them. He then advertised the name of the place where the lists could be reviewed. Appeals were heard for 15 days. After the examination and appeal, the assessor compiled lists of amounts due from each division in his district. He supplied copies of them to the collector, who then gave notice that taxes were due and collected them.

The effective date for taxes to be levied was set by the Secretary of the Treasury as September 1, 1862. Because of the lack of adequate definitions in the act, the complexity of the tax schedules, and the variations in assessment dates, some annual duties were not levied until the following May. By May 1863 a high degree of uniformity in instructions, regulations, decisions, and forms had been developed. Individual assistant assessors, however, continue to alter the forms for their own purposes and to enumerate taxable property in a manner they found convenient.

The original Internal Revenue Act was significantly modified by the amendment of March 3, 1863 (12 Stat. 713), and by the Internal Revenue Act of June 30, 1864 (13 Stat. 223). Congress, by joint resolution of July 4, 1864 (13. Stat. 417), levied a special Income Tax that was to be assessed separately from the existing tax.

An act of December 24, 1872 (17 Stat. 401), abolished the offices of assessors and assistant assessors effective July 1, 1873. On May 20, 1873, the offices were closed and the assessment lists shipped to the office of he Commissioner of Internal Revenue, Washington, DC.

The lists are divided into three categories: annual, monthly, and special. Entries in the annual and monthly lists are for taxes assessed or collected in those specific periods. Special lists augment incomplete annual and monthly lists. They also include special taxes; e.g., the income tax of October 1864.

The lists are arranged by collection district and thereunder by division. They are filmed in the order n which they are bound in the volumes. An index of county names in each district is filmed at the end of this introduction. These records are among Records of the Internal Revenue Service, Record Group 58, in the National Archives. Assessment lists for 1867-73 are also in this record group. Instructions, circulars, and correspondence relating to assessments levied and t the collection of taxes are in the record group and also in General Records of the Department of the Treasury, Record Group 56. Correspondence concerning the settlement of collectors' accounts is in Record of the United States General Accounting Office, Record Group 217.

Summary statistical tables of receipts under the Internal Revenue Act and its amendments are published in annual reports of the Commissioner of Internal Revenue for the years 1862-1867.

Record Group 58 films are located at the National Archives in Washington DC and also at some of the regional branches. Go here to located Record Group 58.

Pat Conwell was kind enough to let me know that you can also look at what rolls of this microfilm the LDS has available. Here's how to find it:

Go to Family Search Catalog
From the list on the left
Select "Author Search"
Fill in: United States, Bureau of Internal Revenue
Select it

For a much more detailed history of federal taxes see the U.S. Treasury's site

Good Luck.

Dividing Line

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