Effective January 24, 2003, the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) was transferred under the Homeland Security bill to the Department of Justice. The law enforcement functions of ATF under the Department of the Treasury were transferred to the Department of Justice. The tax and trade functions of ATF will remain in the Treasury Department with the new Alcohol and Tobacco Tax and Trade Bureau.
In addition, the agency’s name was changed to the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) to reflect its new mission in the Department of Justice.
History of ATF from Oxford University Press, Inc. — 1789–1998 U.S.
The U.S. Bureau of Alcohol, Tobacco and Firearms (ATF) is a tax-collecting, enforcement and regulatory arm of the U.S. Department of the Treasury. In common with all other members of the executive branch, ATF’s responsibility is established by congressional action. ATF cannot enact a law, nor can it amend the law. Charged as it is with fiscal oversight of some of the most controversial topics in Western civilization, ATF strives to maintain professional neutrality while giving a 35-to-1 return on every dollar it spends. ATF has the best cost-to-collection ratio in the federal family.
ATF is the youngest tax-collecting Treasury agency, separated from the Internal Revenue Service by Treasury Department Order No. 120-1 (former No. 221), effective 1 July 1972. Notwithstanding, ATF traces its roots across two hundred years of American history.
In 1789 under the new Constitution, the first Congress imposed a tax on imported spirits to offset a portion of the Revolutionary War debt assumed from the states. Administration of duties fell to the Department of the Treasury, whose Secretary, Alexander Hamilton, had suggested them. Congressional lawmakers were favorably impressed by the results. The imports tax was augmented by one on domestic production in 1791. Taxpayers had grumbled over import duties. Some of them greeted the domestic levy — as they do today — with political resistance, escalating in that early case to the short-lived Whisky Rebellion of 1794. Both revenue sources survived rebellion — as they do today. Although these particular taxes were eventually abolished, similar devices for revenue came and went as needed until 1862. By Act of 1 July 1862, Congress created an Office of Internal Revenue within the Treasury Department, charging the commissioner with collection, among others, of taxes on distilled spirits and tobacco products that continue, with amendments, today. Because taxation so often does evoke resistance, including criminal evasion, during 1863 Congress authorized the hiring by Internal Revenue of "three detectives to aid in the prevention, detection and punishment of tax evaders." Tax collecting and enforcement were now under one roof. Before decade’s end, the Office of Internal Revenue had its own counsel, another component descending in unbroken line to ATF today.
In 1875 federal investigators broke up the “Whisky Ring,” an association of grain dealers, politicians and revenue agents that had defrauded the government of millions of dollars in distilled spirits taxes. Responding to the scandal, Congress undertook the first Civil Service reform acts, acknowledging formally that effectiveness of law depends on the quality of its administrators.
The commissioner’s annual report for 1877 refers to his office as the Bureau of Internal Revenue, a title that it retained for the next seventy-five years. In 1886, a single employee from the Department of Agriculture came to the Bureau of Internal Revenue under authority of the Oleomargarine Act to establish a Revenue Laboratory. The first samples received in the laboratory that 29 December were of butter suspected of adulteration with oleomargarine. In its second century, ATF’s laboratory staff includes — but is not limited to — chemists, document analysts, latent print specialists, and firearms and toolmark examiners, supported by its own highly sophisticated facilities at Rockville, Maryland, Atlanta, Georgia, and Walnut Creek, California. That first chemist would recognize some aspects of laboratory service today (analysis of alcohol and tobacco products, for instance) although tools such as chromatography and electrophoresis might seem magic. There was nothing in 1886 to foreshadow the Laboratory’s sought-after forensic skills in arson, explosives, and criminal-evidence examination, a resource now available to law enforcement personnel worldwide.
Ratification of the Eighteenth Amendment to the Constitution in 1919, in combination with the Volstead Prohibition Enforcement Act of that year, brought to prominence those officers — ‘revenoors’ — charged with investigating criminal violations of the Internal Revenue law, including illicit manufacture of liquors, who coalesced by 1920 into the Prohibition Unit. Evolution of this unit reflects the difficulty of enforcing a nation-wide ban on “manufacture, sale or transportation of intoxicating liquors for beverage purposes.” Internal Revenue’s orientation has been toward collection throughout its history. Enforcement efforts, albeit necessary, never came easily. On April Fool’s Day, 1927, Treasury elevated the Prohibition Unit to bureau status within the department. Congress was impatient with the results. On 1 July 1930 Congress created certain confusion for later historians by transferring “the penal provisions of the national prohibition act” from Treasury’s Bureau of Prohibition (which then ceased to exist) to the Department of Justice’s new Bureau of Prohibition — with an important exception: tax-related and regulatory activities, “the permissive provisions,” remained at Treasury, under a new Bureau of Industrial Alcohol. The most illustrious enforcer during that tumultuous era was Eliot Ness, the “T-man” who toppled Chicago’s organized-crime king Al Capone on tax-evasion charges.
The Twenty-first Amendment to the Constitution, repealing Prohibition, achieved ratification with unanticipated speed by 5 December 1933, catching Congress in recess. As an interim measure to manage a burgeoning legitimate alcohol industry, by executive order under the National Industrial Recovery Act, President Franklin Roosevelt established the Federal Alcohol Control Administration (FACA). The FACA, in cooperation with the Departments of Agriculture and Treasury, endeavored to guide wineries and distilleries under a system based on brewers’ voluntary codes of fair competition. The FACA was relieved of its burden — and effectively vanished from history — after just twenty months, when President Roosevelt in August 1935 signed the Federal Alcohol Administration (FAA) Act. The new FAA received a firm departmental assignment: Treasury once more found itself regulating the alcohol industry.
Although Prohibition was officially over, the era’s side effects continued for decades to mold the shape of ATF. On 10 March 1934 Justice’s Prohibition enforcement duties folded into the infant Alcohol Tax Unit (ATU), Bureau of Internal Revenue, Department of the Treasury. At the same time, the FAA, functioning independently within Treasury, was carrying forward its mandate to collect data, to establish license and permit requirements, and define the regulations that ensure an open, fair marketplace for the alcohol industry and the consumer. In 1940 the FAA as an Administration merged with the ATU. The FAA Act continues today as one foundation of ATF’s enabling legislation.
National dismay over the weaponry wielded so conspicuously by organized crime during Prohibition led to passage in 1934 of the National Firearms Act, followed in four years by the Federal Firearms Act. The newly regulated articles might be firearms, but taxes were involved as ever. The Miscellaneous Tax Unit, Bureau of Internal Revenue, collected the fees. In 1942 enforcement duties for the “Firearms Program” fell to the ATU, which was accustomed to managing controversial industries. In a major Internal Revenue reorganization of 1952, the nearly-century-old Miscellaneous Tax Unit was dismantled. Its firearms and tobacco tax responsibilities went to the ATU. The Bureau of Internal Revenue became the Internal Revenue Service (IRS) we know today. Acknowledging a portion of ATU’s new burden, IRS renamed it the Alcohol and Tobacco Tax Division. This incarnation lasted until 1968 passage of the Gun Control Act, which gave to the laboratory, among other things, responsibility for explosives. The division title shifted to Alcohol, Tobacco and Firearms (ATF) Division. Title XI of the Organized Crime Control Act in 1970 (Title XI) formalized ATF Division explosives expertise. In the same year, moved by a growing perception that the IRS’s revenue-collecting bias did not reflect ATF Division’s enforcement skills, overtures began toward ATF independence.
Treasury Department Order No. 120-1 (originally No. 221), effective 1 July 1972, transferred to ATF from IRS those functions, powers and duties related to alcohol, tobacco, firearms, and explosives. (During the mid-1970s at Treasury’s direction ATF briefly assumed responsibility for wagering laws; that task returned to the IRS in less than 3 years.) Throughout the 1970s, based on determination that accelerants used in arson, when explosions might occur, meet Title XI’s definition of explosives, ATF began demonstrating in court its ability to prove arson. In the Anti-Arson Act of 1982, Congress amended Title XI to make it clear that arson is a federal crime, giving ATF responsibility for investigating commercial arson nationwide.
ATF continues a mutually beneficial interface with its legitimate industries, while refining unique enforcement skills. With developments such as the state-of-the-art Integrated Ballistic Identification System (a computerized matching program for weapons and the ammunition fired from them), accelerant- and explosives/weapons-detection canines, and the Gang Resistance Education and Training (GREAT) program (which gives children the tools to resist membership in violent gangs), ATF leads and supports law enforcement internationally.
In its first quarter-century ATF has had only 4 Directors: Rex Davis, G.R. Dickerson, Stephen Higgins, and John Magaw. The director is appointed by the secretary of the Treasury, and reports to the under secretary (enforcement). ATF headquarters are in Washington, D.C., although most personnel and many ATF operations are decentralized throughout the country, with a few stations overseas. ATF agents, inspectors, and support staff are involved in investigating some of the most violent crimes in society, in regulating some of the most important and sensitive industries in America, and in collecting over $13 billion in annual revenue. ATF is a young federal agency, yet it is heir to the whole experience and proud tradition of “these United States.”
- Annual Report of the Commissioner of Industrial Alcohol. Washington, D.C., 1931 – 1933.
- Annual Report of the Commissioner of Internal Revenue. Washington, D.C., 1863 – present.
- Annual Report of the Commissioner of Prohibition. Washington, D.C., 1927 – 1930.
- ATF Facts - History. Washington, D.C., n.d.
- A Report on The Bureau of Alcohol, Tobacco and Firearms; Its History, Progress and Programs. Washington, D.C., 1995.
- United States Government Manual, 1994/1995, Washington, D.C., 1994. See pp. 496–498.
From A Historical Guide to the U.S. Government, edited by George T. Kurian. Copyright © 1998 by Oxford University Press, Inc. Used by kind permission of Oxford University Press, Inc.