What the IRS Is and What It Does

The IRS is the federal agency that collects income taxes and enforces tax law in the United States

The Internal Revenue Service is a bureau of the U.S. Department of the Treasury. It processes tax returns, collects taxes owed, investigates tax fraud, and publishes the rules that determine how much tax you owe. When you file a tax return, the IRS receives it, checks your math, and either sends you a refund or bills you for what you owe. If you disagree with an IRS decision about your taxes, the IRS also runs the appeals process.

The IRS does not set tax law — Congress does. The IRS interprets and enforces the law Congress writes. This matters because it means the IRS cannot change the tax rate or decide who pays taxes. It can only apply the rules as written.

The IRS is headquartered in Washington, D.C., but operates regional offices and processing centers across the country. Most people interact with the IRS by mail or phone, not in person. The agency employs roughly 80,000 people, though that number has fluctuated based on congressional funding.

Key Takeaways

• The IRS is a federal agency under the Treasury Department that collects income taxes and enforces tax law.
• Congress writes tax law; the IRS interprets and enforces it, so the IRS cannot change tax rates or may be able to access rules on its own.
• The IRS processes returns, issues refunds, collects unpaid taxes, investigates fraud, and runs an appeals process for disputes.
• You can contact the IRS by phone, mail, or online, but wait times are often long and in-person visits require an appointment.

What the IRS actually does day-to-day

The IRS receives roughly 150 million individual tax returns each year. For each one, the IRS checks that the math is correct, that reported income matches what employers and banks reported to the agency, and that the person claimed only deductions and credits they are may have access to to claim. If something does not match, the IRS either adjusts the return or sends a notice asking for more information.

The IRS also collects taxes from people who do not pay voluntarily. This includes wage garnishment (taking money directly from paychecks), bank levies (freezing and taking money from bank accounts), and liens (claiming a legal interest in property). The IRS can also revoke a passport if you owe a large amount of back taxes.

Criminal investigation is a smaller but visible part of the IRS. The agency has a Criminal Investigation division that pursues cases involving tax fraud, money laundering, and identity theft. These cases can result in prison time, not just fines.

How the IRS is structured

The IRS is divided into four main divisions: Wage and Investment (which handles individual returns), Small Business/Self-Employed, Large Business and International, and Tax Exempt and Government Entities. Each division has its own rules, forms, and procedures.

Below the national level, the IRS operates through regional offices. The country is divided into regions, and each region has processing centers where returns are scanned, sorted, and reviewed. This is why your refund might be processed in a different state than where you live or filed.

The IRS also has an independent appeals office. If you disagree with an IRS decision, you can request an appeal without going to court. The appeals office is separate from the office that made the original decision, so it reviews the case fresh.

What the IRS cannot do

The IRS cannot change tax law. Only Congress can do that. If you think a tax law is unfair, the IRS is not the place to complain — Congress is. The IRS can only interpret and apply the law as written.

The IRS also cannot make deals or negotiate taxes owed, except through a formal process called an Offer in Compromise. This is a legal settlement where you pay less than you owe, but it requires meeting strict criteria and the IRS approves only a small percentage of requests.

The IRS cannot contact you by email, text, or social media to demand payment or threaten arrest. If you receive a message claiming to be from the IRS through these channels, it is a scam. The IRS initiates contact by mail, and you can call the IRS using the number on your tax return or official IRS documents.

How to contact the IRS

The main IRS phone line is 1-800-829-1040 for individual tax questions. Wait times are often one to two hours, especially during tax season (January through April). The IRS also operates a website at irs.gov where you can download forms, read publications, and check the status of your refund using the "Where's My Refund?" tool.

You can also mail questions or documents to the IRS. The address depends on your region and the type of issue. The IRS website lists the correct mailing address for your situation. Mail takes longer than phone — typically four to six weeks for a response — but creates a paper record.

Some IRS offices offer in-person help at Taxpayer Assistance Centers, but these require an appointment and are not available in all locations. You can schedule an appointment through the IRS website or by phone.

The difference between the IRS and other tax agencies

The IRS handles federal income tax only. State income tax is handled by your state's tax agency — the names vary by state (Department of Revenue, Tax Commission, etc.). Local property taxes and sales taxes are handled by city or county assessors and tax collectors. If you owe taxes to multiple agencies, you will need to contact each one separately.

The IRS also differs from the Social Security Administration, which handles Social Security benefits and payroll taxes. Though both are federal agencies, they have separate databases and processes. If you have a question about Social Security, the IRS cannot answer it.

Common reasons people contact the IRS

People contact the IRS to report a change in income or address, to dispute a notice they received, to request a payment plan for taxes owed, to report identity theft or a stolen refund, or to ask about a deduction or credit. The IRS also receives calls from people who received a notice they do not understand or who want to know the status of their refund.

Many of these questions can be answered through the IRS website or by reading the notice itself, which usually explains what the IRS found and what you can do about it. Reading the notice carefully before calling can save time, since the IRS representative will ask you to locate it anyway.

Frequently Asked Questions

Is the IRS the same as the Treasury Department?

No. The IRS is a bureau within the Treasury Department. The Treasury Department handles all federal money — spending, borrowing, and collecting. The IRS is the part that collects income taxes. Think of Treasury as the parent agency and the IRS as one division within it.

Can the IRS arrest me for owing taxes?

The IRS cannot arrest you for owing taxes. However, the IRS Criminal Investigation division can pursue criminal charges if you deliberately evaded taxes or committed fraud. Criminal prosecution is rare and requires proof of intentional wrongdoing, not just a mistake or unpaid balance.

What should I do if I think the IRS made a mistake on my return?

Read the notice the IRS sent you — it explains what they found and how to respond. You can agree, disagree, or provide more information. If you disagree, you can request an appeal. The notice includes instructions for each option. You do not have to hire a tax professional, though many people do.

Does the IRS share my tax information with other agencies?

The IRS shares limited information with other federal agencies for specific purposes — for example, to verify income for benefit programs or to locate people who owe child support. The IRS does not sell your information or share it for marketing. Your tax return itself is confidential and protected by law.

What is the difference between the IRS and a tax preparer?

The IRS is a government agency that collects taxes and enforces tax law. A tax preparer is a private person or company that helps you fill out your return. Tax preparers do not work for the IRS, though they must follow IRS rules. You can file your own return, use a preparer, or use tax software — the IRS accepts all three.