It happened on this day in 1862. It started with the the high cost of the the US at war with itself. To help pay for the Civil War, Congress established the Bureau of Internal Revenue. President Abraham Lincoln signed the bill into law, for the feds to collect a three percent tax on incomes ranging from $600 to $10,000, and five percent on incomes over $10,000. It was passed as a temporary law.
The Bureau became the Internal Revenue Service in 1913 when the 16th amendment was added to the Constitution permitting the Government to collect a tax on income. How ironic that a few days before we celebrate our independence, they took away our independence from taxes.