Internal Revenue Service (IRS)

The Internal Revenue Service (IRS) is the federal agency responsible for administering and enforcing the tax laws of the United States. It handles income taxes, payroll taxes, business taxes, audits, and tax refunds.

For home improvement contractors, the IRS is the authority that issues your Employer Identification Number (EIN), requires you to report business income, and regulates how you classify and pay workers (W-2 employees vs. 1099 subcontractors). Whether you operate as a sole proprietor, LLC, or corporation, the IRS is the federal entity that oversees your tax obligations.