The Internal Revenue Service is the nation's oldest, largest and in some ways most powerful enforcement agency.

In a recent year, the agency processed over 232 million tax returns, collected over $2.1 trillion in revenues and disbursed about $284 billion in refunds. The IRS's latest report says that during the same period it offered special advice and assistance in response to 94 million requests for assistance that it received by telephone and at 404 walk-in sites.

To perform this truly monumental task the IRS employs about 98,000 employees in ten service centers, two computer centers and and a number of other regional offices.

To persuade the American people to meet their tax obligations, Congress has provided the IRS with a vast range of powers. Tax returns must be filed. Tax returns must be accurate. Taxes must be withheld or paid on time.

To check on the accuracy of returns, virtually all institutions that disburse funds -- employers paying salaries, banks paying interest, corporations paying dividends, state taxing agencies paying refunds, publishers paying royalties and city lottery organizations paying winnings -- must send a computerized notice to the IRS. Simple math tests and more complex matching programs are then undertaken. A relatively small number of individual taxpayers are selected for face-to-face audits. When discrepancies are discovered as a result of these various examination procedures, the IRS dispatches notices. In addition to the taxes that the IRS says are owed, the notices often include a demand that the taxpayer pay the government a civil penalty along with interest. Taxpayers can appeal the IRS finding that they owe additional taxes in a number of different ways. But if the targeted taxpayer simply declines to meet the assessed liability, the IRS can initiate a forceful collection process.

In certain circumstances, the IRS concludes that the taxpayer knowingly violated the tax laws. In these situations the IRS can recommend to the Justice Department that the taxpayer be charged with a criminal violation. Some IRS criminal referrals are brought under specific tax violations such as the knowing failure to file a return or the knowing filing of a fraudulent return. More frequently, in recent years, the IRS referrals are based on statutes relating to money laundering, drugs and currency violations.