I'm having a lot of confusion trying to understand the founding of the IRS, and the 16th Amendment to the US Constitution. Some people say America still, through the IRS pays England for old debts. Is that true? If that debt has been paid off, when? Are people confusing current national debts to England with past debts?
I am exceedingly curious about who those "Some people" are, and why they write such things.
It's complete nonsense. Haiti had to pay France after independence, but not the United States and not any of the states. The Treaty of Paris of 1783 mentions debts only in the context of private people getting restoration of property. Likewise the Treaty of Ghent of 1814: only restitution of property.
And in any event, the US national debt was paid off for about a year in 1835-6, and the US assumed the state revolutionary debts in 1790.
I don't understand what you mean by "pay a tax to England for debts incurred during the civil war". Did you mean "Revolutionary War" / "War of American Independence" / that stuff between 1775ish and 1783? Because the UK per se stayed out of the US Civil War and the US would owe nothing to the UK per se.
The US federal income tax started in the US Civil War to pay for the massive expenses therefrom, not to pay any debt (except that debts were incurred in paying the massive expenses).
For aspects of the history of the US income tax, and in particular the legal basis and the reason for the 16th Amendment (hint: the US constitution has almost no limits on what Congress can tax; ergo, an income tax has been constitution from the first; the amendment just overruled a nonsensical court ruling and established the method of assessing certain categories of income), please see the Tax Protester FAQ. It is a marvel and a half and clarified so very many issues for me.