What does it cost the IRS to collect taxes?
In 2024, it cost the IRS 36 cents to collect each $100.
The IRS spent $18.2 billion to collect $5.1 trillion in taxes in 2024. In other words, it cost the agency 36 cents for every $100 it collected.
Collecting trillions of dollars from a population of 341 million people and approximately 35 million businesses is no small project. The IRS’s staff of 90,516 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 2024, the agency collected nearly $5.1 trillion, up 26.1% over the previous 10 years. That total included:
- $4.4 trillion from individual income taxes and other individual payroll contributions
- $565 billion from corporate income taxes
- $78 billion from excise taxes
- $48 billion from all others
This revenue funds most of the federal government’s programs, from Social Security and Medicare to defense and support for veterans.
IRS collections increased by $300 billion from 2023 to 2024.
IRS revenue collection, FY 1995–2024
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How much does the IRS cost to operate?
The IRS spent $18.2 billion on operating costs in fiscal year 2024, 65.3% of which went to salaries and benefits for the agency’s staff. The other 34.7% 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 $18 billion since 1995. The $18.2 billion operating cost in 2024 was the highest since 2010.
IRS operating costs reached an all-time high in 2024.
IRS operating costs, FY 1995–2024
The IRS publishes operating costs as a ratio of total revenue collected, and it is measured by the cost of collecting $100. This measure is one way to evaluate how efficiently the federal government generates revenue. The ratio has come down 32.3% from a recent peak of 53 cents in 2010.
In 2024, the IRS spent $0.36 to collect every $100, down from a peak of $0.53 in 2010.
IRS cost for each $100 collected, FY 1995–2024
Where does this data come from?
Where does this data come from?
This data comes from the IRS Data Book within the agency’s Statistics of Income database, which updates annually and was last updated for fiscal year 2024. The IRS is a subdivision of the Department of the Treasury responsible for administering and enforcing the nation’s tax laws.
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