The Internal Revenue Service (IRS) spent $16.1 billion to collect $4.7 trillion in taxes in 2023. In other words, it cost the agency 34 cents to collect $100.
Collecting trillions of dollars from a population of 336 million people and around 35 million businesses is no small project. The IRS’s staff of 82,990 people collects and evaluates returns, issues refunds, offers taxpayer assistance, oversees tax-exempt organizations, and enforces tax law.
How much money does the IRS collect?
The IRS is responsible for collecting internal revenue — mostly in the form of taxes — from individuals and businesses across the US. In fiscal year 2023, the agency collected nearly $4.7 trillion, a 26% increase over the previous 10 years. That total included:
- $4.1 trillion from individual income taxes and other individual payroll contributions
- $457 billion from corporate income taxes
- $74 billion from excise taxes
- $35 billion from estate and gift taxes
How much does the IRS cost to operate?
The IRS spent $16.1 billion on operating costs in 2023, 65% of which went to salaries and benefits for the agency’s staff. The other 35% paid for information services, infrastructure, rent and utilities, equipment, travel, and more.
After adjusting for inflation, IRS operating costs have fluctuated between just under $14 billion and just over $17 billion since the 1990s. The $16.1 billion total in 2023 was the highest since 2011.
This revenue goes on to fund the bulk of the federal government’s programs, from Social Security and Medicare to defense and veterans’ support.
This measure is one way to evaluate how efficiently the federal government generates revenue. The ratio has come down from a recent peak of 53 cents in 2010, a decrease of 36%.
Read more about government efficiency, government revenue streams and spending, and get the facts delivered to your inbox weekly when you sign up for our newsletter.
