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 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.