When it comes to filing taxes, it’s important to understand the various tax authorities that are involved. In Canada, we have the Canada Revenue Agency (CRA), but in the United States, the tax authority is the Internal Revenue Service (IRS). This article will provide an overview of the IRS, its functions, and what you need to know about it.
What is the IRS?
The Internal Revenue Service (IRS) is the tax collection agency of the U.S. federal government. It was established in 1862 by President Abraham Lincoln to fund the Civil War effort. Today, the IRS is responsible for collecting federal income taxes, enforcing tax laws, and administering the Internal Revenue Code.
What are the functions of the IRS?
The IRS has several key functions, including:
- Collecting taxes: The IRS collects taxes from individuals and businesses in the United States.
- Enforcing tax laws: The IRS enforces tax laws by auditing taxpayers and pursuing those who fail to pay their taxes.
- Administering the Internal Revenue Code: The IRS is responsible for administering the Internal Revenue Code, which is the set of federal tax laws that governs how taxes are collected and enforced in the United States.
- Providing taxpayer assistance: The IRS provides assistance to taxpayers who need help understanding their tax obligations or resolving issues with their tax returns.
What do you need to know about the IRS?
If you are a U.S. citizen or resident, you are required to file an income tax return with the IRS every year. This includes individuals who live abroad, but still earn income in the United States. Failure to file a tax return or pay taxes owed can result in penalties, interest charges, and legal action.
It’s important to note that the IRS has the authority to garnish wages, seize assets, and place liens on property to collect unpaid taxes. If you owe taxes to the IRS, it’s important to work with them to resolve the issue as soon as possible.
The IRS also offers various tax relief programs for taxpayers who are struggling to pay their taxes. These programs include installment agreements, offers in compromise, and hardship relief.
Conclusion
In conclusion, the IRS is the tax collection agency of the U.S. federal government. It’s responsible for collecting federal income taxes, enforcing tax laws, and administering the Internal Revenue Code. If you are a U.S. citizen or resident, it’s important to understand your tax obligations and work with the IRS to resolve any issues as soon as possible. If you need help with your taxes, the IRS offers taxpayer assistance and various tax relief programs.