Internal Revenue Service

The Internal Revenue Service (IRS) is the federal agency responsible for administering and enforcing all internal revenue laws in the United States, except those relating to alcohol, tobacco, firearms, and explosives, which are the responsibility of the ALCOHOL, TOBACCO, FIREARMS, AND EXPLOSIVES BUREAU's Tax and Trade division.

The IRS is the largest agency in the TREASURY DEPARTMENT. By the mid-1990s it had approximately 110,000 employees, 650 office locations in the United States, and 12 offices abroad. The agency processes approximately 205 million tax returns and collects more than $1.2 trillion each year.

The U.S. tax system, which the IRS oversees and administers, is based on the principle of voluntary compliance. According to the IRS, this means "that taxpayers are expected to comply with the law without being compelled to do so by action of a federal agent; it does not mean that the taxpayer is free to decide whether or not to comply with the law."