It’s Tax Time!
Researching in the Internal Revenue Assessment Lists of 1862-1866
By: Carolyn L. Barkley
Benjamin Franklin, writing to French historian Jean-Baptiste Leroy on 13 November 1789, commented, “Our new Constitution is now established, and has an appearance that promises permanency; but in this world nothing can be said to be certain, except death and taxes.” Despite the unarguable inevitability of death, Franklin might also have stated that “nothing can be said to be certain, except war and taxes,” as throughout much of the history of the United States, the two have been inextricably linked. A related factor is the growth of “big government.”
Although the modern Internal Revenue Service (IRS) was not created in 1952, taxes and tax collection began early in the United States history. In 1792, Congress, seeking a way to pay off the debts incurred by the new nation during the Revolutionary War, established the office of Commissioner of Revenue. By doing so, Congress was exercising its authority, under Article 1, paragraph 8 of the U. S. Constitution, to “lay and collect taxes, duties, imposts, and excises.”
This action was undertaken largely at the instigation of then Secretary of the Treasury, Alexander Hamilton. By the time Thomas Jefferson assumed the presidency in 1801, over 400 revenue officers were busily collecting taxes on distilled spirits, land, houses and slaves. Jefferson, however, strongly opposed Hamilton’s fiscal policies and abolished this system of taxation, and the country returned to its previous reliance on revenues from customs duties. Within twenty years, the War of 1812 once again created a need for increased revenues and taxes seemed the most expedient method. Americans paid taxes on sugar, carriages, liquor, furniture and luxury items such as watches and pianos, but when the war was over, such taxes were once again repealed.
For a period of almost fifty years, customs duties continued as the country’s predominant method of revenue generation. This tax-free period would end with the outbreak of the Civil War. Clearly customs duties alone could not fund a major war effort, and Congress passed the Civil War Revenue Act (5 August 1861), authorizing the first income tax and a direct tax of $20 million apportioned among the states of the Union. In order to collect these taxes, the Bureau of Internal Revenue was established within the Department of the Treasury, and the country was divided into 185 collection districts. Between 1861 and 1863, the Bureau grew from three clerks to nearly 4,000. The initial 1861 tax rate was 3 percent on income over $800, thus exempting most of the nation’s wage earners. A year later, as the financial pressures of a protracted war became reality, the tax rate became graduated, with 3 percent levied on income between $600 and $10,000 and 5 percent on income over $10,000. Two years later, the rate had risen to 5 percent on income between $600 and $5,000; 7.5 percent on $5,000-$10,000; and 10 percent on income over $10,000. Twenty-one percent of the Union war effort would eventually be funded by the collection of these income taxes.
Following the Civil War, the income tax was abolished in 1872, and tax collection once again reverted to customs duties. The need to transform the country’s economy from wartime to peacetime, a process that saw increased development of the railroad system, however, required more revenue than customs duties alone could provide. In 1894, Congress again passed income tax legislation. This law was soon declared unconstitutional, however, as it did not adhere to the constitutional provision that taxes be apportioned equally among the states. In 1913, however, the sixteenth amendment was ratified giving Congress the power to collect taxes without regard to state apportionment. Only forty-two of the forty-eight states supported the amendment with, Connecticut, Rhode Island and Utah rejecting it, and Pennsylvania, Virginia and Florida not engaging the issue. The tax rate was established at 1 percent on net personal incomes above $3,000; an additional surcharge of 6 percent was levied on incomes of more than $500,000. During World War I, taxes rose precipitously, with the top rate reaching 77 percent. The number of bureau employees increased too, as did the frequency of inefficiency, fraud and tax evasion. Income taxes were now here to stay, but by 1929, the top tax rate had dropped to 24 percent. During World War II, payroll withholding and quarterly tax payments were introduced, and finally, a complete overhaul of the taxation system was initiated in 1952 bringing much needed reform. The name of the Bureau of Internal Revenue was changed to the Internal Revenue Service.
Taxation records for the period 1862 to 1866 are available to researchers in Record Group 58, Records of the Internal Revenue Service. Records survive for Alabama, Arkansas, California, Colorado, Connecticut, Delaware, the District of Columbia, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Michigan, Minnesota, Mississippi, Missouri, Montana, Nevada, New Hampshire, New Mexico, New York, New Jersey, North Carolina, Oregon, Pennsylvania, Rhode Island, South Carolina, Texas, Vermont, Virginia, and West Virginia. Some state assessments include records for 1867 through 1918, in addition to the period 1862 to 1866. These records are available on microfilm (each state has a separate microfilm publication number), on Footnote, and as an Ancestry.com database (U.S. IRS Tax Assessment Lists, 1862-1918). During a recent trip to the National Archives in Washington, D.C., I spent several hours browsing through the records of several states. [Arguably, it is quicker to search the online; however, I believe that you can gain a clearer understanding of the structure and contents of records by examining either the original textual document (if available) or the microfilmed version.]
If you are researching the assessments at the National Archives, it is important to consult a printed copy of the appropriate descriptive pamphlet [DP] (available in printed form in notebooks in the first-floor research room or on the first few frames of the microfilm itself) in order to identify the tax district for the city or county in which you will be searching. Maryland, for example had five districts into which its twenty-two counties and the City of Baltimore were divided. By consulting the DP, you will know which roll of microfilm to view for a specific county/city, time frame and type of assessment (annual, monthly or special). Read carefully as records may not be extant for all years or for all types of assessments in each tax district. In particular, if you are searching for an individual assessment in West Virginia, the DP explains that the original Virginia tax districts established in 1862, remained the same after West Virginia achieved statehood in 1863. Thus the microfilmed records of the five counties in the eastern panhandle (Morgan, Berkeley, Jefferson, Hampshire and Hardy) remained part of Virginia’s tax district number three. When the tax districts for Virginia and West Virginia were reorganized in May 1865, the records for those five counties were reported as part of the West Virginia assessments.
Generally, each record will contain the name of the collection district, the name of the collector, the date of the list, the name of the person or business being taxed, the address, taxable period, amount reported by the collector, any remarks about the assessment, the article or occupation being taxed, the record of payment if the tax was paid, and the amount paid or abated.
The assessment records can provide an interesting insight into the life of communities and individuals during and after the war period. While Footnote and Ancestry.com invite a search for a specific individual, browsing in the microfilm can provide a broader picture of a community and the socio-economic status of its residents.
Here are some examples of the types of information to be found:
- In October 1865, John G. Miller, of Barboursville, West Virginia, paid $1.00 tax on a carriage and $1.00 on a watch. A. T. Ray & Sons, of Buffalo, West Virginia, paid a tax of $5.83 on his hotel and J. M. Wells & Co., also of Buffalo, paid $192.00 on a steamboat valued at $8,000. In addition to a $10.00 tax on his hotel and a $2.00 tax on carriages, Warren G. Hibbard, of Buck Spring, West Virginia, paid a $2.00 tax on a piano.
- On 8 January 1863, Daniel Ramsburgh, of Middletown, Maryland, paid $9.02 tax on woolen goods valued at $300.50; and Isaac Ramsburgh, of Whitechapel Post Office, in Frederick County, Maryland, paid $4.00 on two one-horse carriages valued at $75.00 each. Lewis Powel [sic] of Lewistown, Maryland, described as a peddler second class, paid $10.00 (a rate for eight months) for a class B license.
- J. S. Leach, of Smithfield, North Carolina, a physician, paid $10.00 for a twelve-month license, as well as $1.00 on a buggy, $2.00 on a watch, and $1.00 on a piano. Delia W. James, also of Smithfield, paid $10.00 for a twelve-month license as a photographer. A. M. Nobel of Clayton, North Carolina, paid $1.00 on his watch, $2.80 on fifty-six ounces of silver plate (rate of $.05 per ounce), and $9.17 for an eleven-month license as a retail dealer.
When browsing the North Carolina assessments for 1866, my eye was caught by an entry for B. F. Moore, a lawyer in Raleigh, Wake County, who was paying $110.00 on income of $1,106 and $220.00 on further income of $4,400, as well as taxes on three watches and a piano. It was noted that $88.00 in taxes had been withheld. As these amounts seemed large in the economic aftermath of the Civil War, I decided to check for Mr. Moore in census records. In 1870, Bartholomew Moore lived with his wife Lucy and children George, Annie, Ellen, Benjamin, Van, James and Frederick. The household employed a cook and a house servant. Moore owned real estate valued at $22,000 and personal property valued at $10,000. The neighboring household, between the Moore family and their lawyer neighbor John Gatling, was that of Harry Johnson, a 23-year-old black gardener. It is not possible to determine from the census if Johnson was a gardener for the Moores or the Gatlings, or both, but the picture is one of wealth. Researching backward in the census, in 1860 Moore’s real estate was worth $13,000 and his personal property was worth $175,000. In 1850, Moore’s occupation was listed as Attorney General of North Carolina. It was interesting to note that the war seemed to have a significant impact on the value of his personal property, presumably from the loss of slaves (although I was unable to identify him in a quick look at the slave census schedules), while his real estate value increased.
The predominant items being taxed in the majority of states and counties that I browsed through included taxes on watches, pianos, business licenses, horse carriages, hotels, etc. When I looked at my own county, Nelson County, Virginia, however, I discovered quite a different picture. John G. Coleman Jr. paid a tax of $1.50 on fifteen swine and $45.00 on thirty gallons of brandy; George W. Fortune paid tax on three swine and eighty gallons of brandy; Jacob Farrow paid $150.00 on 100 gallons of brandy and $54.00 on twenty-seven gallons of whiskey. H. N. Coleman, of Rockfish Depot, a distiller, paid $80.0 on forty gallons of whiskey in February 1866. Any questions about the major industry in this county? (It also makes me wonder how many residents of the time were producing alcohol and not paying taxes on it.) Inasmuch as Nelson County today has over twelve wineries, two breweries, a distillery and a cidery that is under construction, I would say that the times have not changed much!
Whenever you delve into tax lists, remember to include the Internal Revenue Assessment records as part of your search. They are well worth your attention. You may not find an attorney general or a distiller, but you will find valuable and often telling.