The Internal Revenue Service
Summary
The IRS spent $18.97 billion and used 95,226 full-time staff to run the federal tax system in FY2025 -- about $55.41 for every U.S. resident -- while its own tax gap estimate says enforcement recovers roughly $90 billion a year that would otherwise go uncollected.
What is this organization?
What does it do?
In fiscal year 2025, the processed 271.4 million tax returns and other forms⧉, including 162.8 million individual income tax returns⧉. It collected $5.31 trillion in gross tax revenue⧉ and issued 120.6 million refunds totaling $638.8 billion⧉ back to filers, netting the federal government $4.67 trillion after refunds⧉. Running that machine cost 36 cents for every $100 collected⧉ in FY2025.
What does it cost to run — money and people?
The 's actual expenditures totaled $18.97 billion in FY2025⧉, split mostly between enforcement ($7.15 billion) and operations support ($6.56 billion)⧉, with taxpayer services and technology modernization splitting the rest. It used 95,226 full-time equivalent positions⧉, though only 80,967 employees remained in active pay status by September 30, 2025 -- down from 99,628 a year earlier⧉ as thousands accepted federal deferred-resignation and early-retirement offers. Divided across the Census Bureau's 342.3 million U.S. residents⧉, the FY2025 budget works out to $55.41 per person.
View data as table
| Enforcement | 7,154,831 | 37.7% of budget |
|---|---|---|
| Operations Support | 6,558,215 | 34.6% of budget |
| Taxpayer Services | 4,411,451 | 23.3% of budget |
| Business Systems Modernization | 839,715 | 4.4% of budget |
Why is it good for society?
The 's own Tax Gap Projections for tax year 2022 -- the newest year it has published⧉ -- put the gross tax gap, tax owed but not paid voluntarily and on time, at $696 billion. Left alone, that gap would only grow: instead, enforcement and other late payments recover a projected $90 billion of it every year⧉, lifting the compliance rate from an 85.0% voluntary rate to an 86.9% net rate⧉. That $90 billion is revenue a functioning collector pulls back that would otherwise go uncollected.
- The 's FY2025 budget works out to $55.41 per U.S. resident -- and its own Tax Gap Projections say enforcement recovers roughly $90 billion a year that would otherwise go uncollected, well over four times the agency's entire annual budget.
- The 's active workforce fell from 99,628 employees in pay status a year earlier to 80,967 by September 30, 2025, even as its funded count rose to 95,226 -- a gap driven by deferred-resignation and early-retirement departures.
Your handles.* Having a problem the itself hasn't resolved? The Taxpayer Advocate Service is 's independent internal advocate -- file Form 911 to open a case. To report suspected tax fraud or evasion, use the IRS Whistleblower Office's Form 211, which can pay 15-30% of what the collects as a result. The 's own budget is set each year through the Financial Services and General Government appropriations bill, worked by the House and Senate Appropriations Committees.
Sources(6) ▾
- Internal Revenue Service, Internal Revenue Service Data Book, 2025 (Publication 55B) (2026-06-05) — The 's own annual statistical compendium covering October 1, 2024 - September 30, 2025 -- source for this entry's workload figures (returns/forms processed, gross and net collections, refunds issued), budget-by-activity breakdown, total , and employee counts. irs.gov · original document
- Internal Revenue Service, Tax Gap Projections for Tax Year 2022 (Publication 5869, Rev. 10-2024) (2024-10-01) — The 's own most recent tax gap estimate -- source for the gross/net tax gap, the dollar amount recovered through enforcement and other late payments, and the voluntary/net compliance rates used in this entry's mechanism section. Tax year 2022 is the newest year for which the has published a tax gap projection; it is a different reference year than the FY2025 budget/workload figures elsewhere in this entry and is labeled as such throughout. irs.gov · original document
- Internal Revenue Service, The agency, its mission and statutory authority (2025-01-01) — The 's own identity page -- source for its mission statement, its status as a bureau of the Department of the Treasury, and its citation of its own governing statutes (26 U.S.C. 7801 and 7803). irs.gov · original document
- Internal Revenue Service (Newsroom), Historical Highlights of the IRS (2025-01-01) — The 's own official history page -- source for the 1862 creation of the Commissioner of Internal Revenue, the 1913 ratification of the 16th Amendment, and the 1953 renaming from the Bureau of Internal Revenue to the Internal Revenue Service. irs.gov · original document
- Office of the Law Revision Counsel, U.S. House of Representatives (uscode.house.gov), 26 U.S.C. Section 7803 -- Commissioner of Internal Revenue; other officials (2025-01-01) — The current U.S. Code text -- source for the Commissioner of Internal Revenue's creation, presidential appointment with Senate confirmation, and 5-year term. uscode.house.gov · original document
- Office of the Law Revision Counsel, U.S. House of Representatives (uscode.house.gov), 26 U.S.C. Section 7801 -- Authority of Department of the Treasury (2025-01-01) — The current U.S. Code text -- source for the Treasury Secretary's statutory authority over administration and enforcement of the internal revenue laws, the authority the exercises on the Secretary's behalf. uscode.house.gov · original document
Comments
Always open. Logged-in readers can annotate paragraphs in place.
The traces to the Commissioner of Internal Revenue, an office Congress created in 1862⧉ via a Civil War revenue law that also enacted the nation's first income tax. The 16th Amendment's 1913 ratification⧉ gave Congress power to tax incomes directly, and the office grew into the Bureau of Internal Revenue; in 1953, President Eisenhower renamed it the Internal Revenue Service⧉. Today the IRS is a bureau of the Department of the Treasury⧉: 26 U.S.C. Section 7801⧉ gives the Treasury Secretary authority over the tax code, while 26 U.S.C. Section 7803⧉ creates the Commissioner of Internal Revenue -- appointed by the President and confirmed by the Senate to a 5-year term -- who runs the agency day to day.