What does the Internal Revenue Service do?

Updates published annually

The Internal Revenue Service (IRS) is a subdivision of the Department of the Treasury responsible for administering and enforcing the nation’s tax laws. It processes tax returns, collects federal taxes, issues refunds, and ensures compliance through audits and enforcement actions. The agency also provides guidance and assistance to help individuals and businesses understand and meet their tax obligations. It was established in 1862.

In FY 2024,

$230B

was spent by the Internal Revenue Service

In FY 2024,

17.4%

of Dept. of the Treasury spending was by the Internal Revenue Service

How much does the Internal Revenue Service spend?

The Internal Revenue Service spent a net total of $230 billion in fiscal year (FY) 2024. This was 17.4% of the $1.3 trillion spent by the Department of the Treasury, which itself was 19.5% of all federal spending. The IRS ranked first among TREAS subdivisions in net spending.

Net spending is the difference between agency spending and any financial accounts generating funds from the agency’s own activities, like fees or rent. When these funds offset all spending, net spending appears negative. Some agencies tend to operate with positive net spending while others will register negative net spending sometimes or often.

The Internal Revenue Service ranked first among Department of the Treasury divisions in net spending in 2024.

TREAS net spending by division, FY 2024

Like the overall federal budget, agency spending may shift over time due to population growth, changes in policy and programs, and emerging problems to address. Adjusting for inflation, the Internal Revenue Service’s federal spending has increased from $16 billion in 1980 to $230 billion in 2024.

The Internal Revenue Service’s federal spending in FY 2024 was higher than in FY 1980.

Yearly federal net spending by IRS, adjusted for inflation (2024 dollars), FYs 1980–2024

Since 1980, the Internal Revenue Service's spending has increased 1,335%, while overall spending has increased 193.7%.

As a percentage of the overall federal budget, a positive number means agency net spending made up some positive share of total federal spending; a negative number means that net generated funds offset a portion of total spending. IRS spending grew more than overall federal spending since 1980, which means that its share of the federal budget increased. In 2024, IRS accounted for 3.4% of overall federal spending.

Major legislation, internal or global economic conditions, and acute events like the COVID-19 pandemic can affect spending year to year. For example, the federal budget fluctuated during the pandemic, rising from $5.3 trillion (in 2023 dollars) in 2019 to $7.7 trillion in 2020 and $7.8 trillion in 2021.

The Internal Revenue Service’s share of federal spending in FY 2024 was higher than in FY 1980.

Net spending by IRS as a share of federal spending, FYs 1980–2024

Most federal spending can be categorized as direct or indirect. Direct spending refers to money the federal government spends on budget items such as federal programs, employee salaries, and debt interest. Indirect spending refers to federal transfers to state and local governments.

In FY 2024, the Internal Revenue Service transferred 7.9% of its total spending to states and local governments.

The chart below outlines all net IRS spending.

How did the Internal Revenue Service spend its budget in 2024?

Federal government net spending isolated to IRS, FY 2024

How many people work for the Internal Revenue Service?

Some 99,001 of the 2.31 million total civilian federal employees work for the Internal Revenue Service as of September 2024. This is 4.8% more people than the division staffed in 2010.

The number of federal employees working for the Internal Revenue Service has increased 4.8% since 2010.

Number of federal employees working for IRS, September 2010–2024

The Internal Revenue Service accounts for 4.3% of the overall federal workforce. As the number of federal employees has changed, so too has the way the workforce is organized, with resources allocated to agencies depending on government priorities. The division constituted a smaller share of the overall federal workforce in September 2024 compared to 2010 (4.5%).

While the number of employees on an agency’s payroll contributes to that agency’s expenditures, some agencies have relatively few employees compared to their budget or vice versa, giving them an outsized share of either the budget or the workforce. According to the most recent data, the Internal Revenue Service's share of the workforce (4.3%) is larger than its share of the budget (3.4%).

Who leads the Internal Revenue Service?

The IRS is led by the Commissioner of Internal Revenue. The commissioner is nominated by the president and confirmed by the Senate. This official reports to the Secretary of the Treasury and is responsible for overseeing the administration and enforcement of federal tax laws. The commissioner serves a term of five years.

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Methodology

USAFacts standardizes data, in areas such as time and demographics, to make it easier to understand and compare.

Page sources

USAFacts endeavors to share the most up-to-date information available. We sourced the data on this page directly from government agencies; however, the intervals at which agencies publish updated data vary.

Office of Personnel Management
FedScope
Office of Management and Budget and US Department of the Treasury
Budget of the US Government and Monthly Treasury Statement