It’s no surprise that every single thing that is alive, can move, and more importantly, *that makes money, more specifically,* ***in America***, gets taxed, by the government.
This includes income tax, sales tax, corporate tax, property tax, capital gains tax, and more.
But my primary inquiry is how does the IRS collect funds from everyone?
Do they get wire transfers from 250M people all over the country, for different tax filings?
And what kind of bank account does the IRS have and use for their transactions?
In: 1
The vast majority of money collected by the IRS is collected from businesses. That includes sales and income tax. When you get your paycheck there have been taxes withheld. Those payments are made directly to the IRS from your employer. The same is true of sales tax. Most of these payments are probably still remitted by check which are deposited in the account of the U.S. Treasury which is held at the Federal Reserve.
When you get hired at a business, you fill out an I-9 form. That form tells your employer how much to take out for taxes. Part of the business(payroll) tax is paid by your taxes(as I understand) and if you paid too much you get some back. That is why your company sends you your W-2 not the federal government.
The IRS has 33 districts covering the 50 states in the US. In addition there are 3 return processing centers, allocated to divide up the workload, where all the paper forms and checks are handled. Some people file quarterly, but most file once a year. Employers send money withheld from paychecks to the IRS every payday on behalf of all their employees. It’s a major financial data processing task. They have consolidated from 11 data processing centers to only 2, the largest being their main facility in Martinsburg WV.
The IRS uses many accounts, set up by the Treasury, to move all its revenue around, and also generate the electronic transfers used to direct deposit refunds.
In addition to what everyone said above, when you do your taxes every spring, you will be notified if you owe money (for example my husband is self-employed, so he doesn’t have an employer to withold money from his pay checks) and then you pay it like a regular bill (online or with a check).
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