eli5: How exactly does the IRS collect money from everyone (i.e, individuals, families, small businesses, charities, enterprises, institutions, corporations, as well as colleges and universities)

Question

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

Answer 1

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.