The function of the current IRS is to collect revenues and enforce tax laws.
The problem with the current system and the IRS as we know it, is the TAX CODE, which is too complex. Another system, like the "Fair Tax" where complex "exceptions" are made will not fix it. Simplifying it, by imposing a flat tax and eliminating deductions is what will "fix" it. The "prebate" systems sounds like a recipe for disaster, to me.
The allegation that there will no longer be a federal government entity like the IRS under a Fair tax system doesn't hold water. There will always be a federal government entity of SOME KIND to collect taxes and enforce tax laws. It doesn't need to be nearly as complex as our current "system" is. That's the argument I'm making.