Internal Revenue Service (IRS): What is it responsible for?

The Federal government utilizes the funds on federal purposes via federal taxation like roads, the military, education, and healthcare, among others. The Internal Revenue Service or IRS is tasked with the collection of the taxations and the regulation of the nation’s tax codes.

Some of the functions of the Internal Revenue Service are to collect the proper amount of tax from the tax-paying public and to render services like tax refund, audit, and aid to the tax-paying public. One ought to be informed about the IRS to avoid non-compliance and land in trouble.

What exactly does the IRS do? 

The Internal Revenue Service’s job is to execute and enforce the United States government’s federal tax law under the Internal Revenue Code (IRC). The following are some of the Internal Revenue Service’s core functions:

• Implements federal tax codes: Applies federal tax codes and administers federal tax legislation.
•  The Federal Tax Collection is engaged in the collection of income tax, payroll tax, corporation tax, and excise tax.
• Taxpayer services: Engaging with the taxpayers through provision of information, guidance, and assistance.
• Conducting tax audits: Implements tax compliance through auditing tax returns.
• Enforcement of tax: It strives to uncover the defaults and frauds.
• Excess payments by the taxpayers are repaid to them in terms of processing.
• Issuance of Publications & Forms
• Publishes official tax publications and tax forms.

What is the IRS responsible for?

The IRS has many other roles and responsibilities apart from tax collection. The most significant of these activities are reflected in the following sections.

1. Interpretation of tax law: The Internal Revenue Service (ISR) works towards applying, administering, and interpreting the tax code in an effort to bring corporates and individuals into tax compliance.
2. Revenue generation and collection: Taxes finance the federal government’s outlay on Social Security and Medicare and on public works by the government. The IRS oversees the tax system to make it efficient and legal.
3. Taxpayer education & assistance: The IRS assists taxpayers with the following tools and services:
   • IRS.gov: Tax publications, online tools, and FAQs
   • Taxpayer Assistance Centers: In-person help with complicated tax issues 
   • Publications and Notices: Credits, Deductions and Filing Requirements
4. Prevention and investigation of tax evasion: The IRS enforces tax compliance by investigating several forms of misconduct, including:
   • Tax evasion (not declaring his income)
   • Improper or incorrect tax deductions or losses
   • Identity Fraud or Abusive Use of Tax Information
5. Regulation of tax-exempt: Charities, non-profits, and religious organizations are supervised by the IRS to determine if such organizations are entitled to a tax exemption.
6. International tax compliance: The global taxation of American residents, foreign investors, and multinational entities is regulated by the United States Internal Revenue Service.
7. Passing new tax acts: When Congress enacts a fresh tax law, the IRS takes several implementation steps:
   • Simplifies tax returns and procedures
   • Provides counsel to taxpayers and business entities
   • Simplifies tax enforcement and collection processes
8. Record keeping: The Internal Revenue Service keeps taxpayers’ records in custody and also protects information. To facilitate audit purposes, tax returns are supposed to be retained by institutions and individuals for three years.

Who do we owe the IRS?

Talking about taxes isn’t always fun — but understanding who owes what to the IRS, and when, is non-negotiable for businesses and individuals alike. The following sections break down the different types of income subject to federal taxation, the basic filing obligations, and what happens when things fall through the cracks.

Taxable income & tax burden

All US citizens as well as permanent residents are subject to paying federal taxes. Federal taxation is imposed on:

• Pay and wages – Reported on Form W-2
• Business Income & Self-Employed Income: Schedule C & Form 1099-MISC
• Investments and capital gain are reflected on Form 1099-DIV & Form 1099-B

Filing tax requirements

Taxpayers are obliged to submit a form 1040 tax return if their income levels are above a certain threshold.

Payment date

• April 15: Deadline to file annual tax returns by individuals
• Estimated Taxes for the Quarter – Required if Self-Employed

Diversion of Non-payment

Non-payment of tax incurs a variety of penalties:

• Late Payment Penalty & Interest – Accrue to payment of tax
• IRS penalties: You will receive failure-to-file and failure-to-pay penalties
• Wage Garnishment & Liens – The Internal Revenue Service can garnish overdue tax debt

Payment plans & installment agreements

The IRS provides the following options to pay back taxes:

• Installment Agreements: Payment plans for unpaid tax
• Offer In Compromise (OIC) Program under the debt

Taxpayer rights

The following are the taxpayers’ rights:

• Equality of treatment of determinations by the Internal Revenue Service
• Having a professional tax representative as a client
• Confidentiality of tax data and information security

Taxpayer rights and obligations

The IRS also formalized these principles in the Taxpayer Bill of Rights, which outlines what people can expect when dealing with tax matters. At the same time, there are clear responsibilities tied to those rights.

• Right to Information – Open tax data
• The Right to Privacy – Protection of Personal Information
• Right to a fair appeal – Obligation to resolve conflicts
• Submit tax returns on time
• Pay the tax by or on the date of payment
• Maintain accounts of finance to prepare and submit returns and audit

Assistance & tools

While the IRS can feel like a black box at times, they do offer a range of tools to help both individuals and businesses stay on track. Many of these resources are self-serve, but in more complex cases, support is available.

• IRS.gov: The Internal Revenue Service’s official Internet site with tax form downloads, tax calculators and tax FAQs.
• IRS Publications: Tax law explanations of tax deductions and tax credits available for downloading at no charge.
• Taxpayer Assistance Centers: In-person assistance on complicated tax matters.
• IRS telephone support: Live agents are available to assist (although with long hold times).

Human resource relations with the IRS

Human resource departments deal with the IRS on numerous areas of compliance. These include: Payroll Tax Information, Withholding and Reporting. The wages of the worker are subject to withholding of federal income tax, Social Security tax, and tax on Medicare by employers. Employers also remit payroll taxes in a report to the Internal Revenue Service.

• Form 1099 and W-2 Preparation

• • W-2 Form – Provided to employees to inform them about wages
  • Form 1099 – Provided to independent contractors
• The Electronic Federal Tax Payment System: The HR departments utilize EFTPS to make payroll tax deposits.
• Compliance with Tax Legislation: Taxes are taken out by HR and remitted as required to the IRS.
• Employee Tax Enquiry Procedure: Human resources informs workers about tax forms, withholdings, and tax consequences on benefits.
• Bookkeeping and IRS Audits: They maintain payroll tax records as well as assist with IRS audit support.

The IRS isn’t just the agency that collects taxes — it’s the one responsible for enforcing federal tax law, ensuring compliance across the board, and providing support to those navigating the system. Its role reaches far beyond issuing bills. From processing payroll filings to generating W-2s and maintaining oversight of tax reporting for both individuals and businesses, the IRS keeps the system running. And while failing to pay taxes can result in penalties, interest, or legal consequences, the agency also equips taxpayers with the tools and documentation they need to stay compliant — especially when it comes to payroll and reporting obligations. Still, the relationship isn’t one-sided. Taxpayers are granted certain rights, but they also carry clear responsibilities. 

For those managing tax compliance inside organizations, IRS.gov remains the most reliable resource for current forms, guidance, and updates. In the end, what really matters is this: staying ahead of the IRS takes less effort — and costs far less — than dealing with the consequences of falling behind.