The Department of the Treasury

The IRS is the largest bureau within Treasury and the agency responsible for collecting nearly all federal tax revenue, more than $5 trillion in a typical year, from individual income taxes to corporate taxes to excise taxes. It processes over 160 million individual tax returns annually and administers the tax code Congress writes.

The IRS also runs taxpayer enforcement and audit programs, issues most federal tax refunds, and administers refundable tax credits like the Earned Income Tax Credit that function as a direct income supplement for millions of lower-income working families.

The agency's staffing and budget have been a running political fight. After years of cuts left it unable to answer most phone calls, the 2022 Inflation Reduction Act added roughly $80 billion over a decade for enforcement, service, and technology; Congress then clawed back a large share of it in subsequent budget deals.

Treasury and the Congressional Budget Office estimate every additional dollar spent on IRS enforcement returns several dollars in taxes that would otherwise go unpaid, part of a "tax gap" the IRS puts at several hundred billion dollars a year, concentrated among high-income filers and businesses with complex, hard-to-verify income.

The U.S. Mint produces all coins used in everyday commerce, striking billions of nickels, dimes, and quarters each year (it struck its last circulating penny on November 12, 2025) at facilities in Philadelphia, Denver, San Francisco, and West Point. It also produces commemorative coins and holds the nation's gold reserves at Fort Knox, Kentucky.

The Bureau of Engraving and Printing is where all U.S. paper currency is designed and printed, using specialized security features like color-shifting ink and embedded threads to deter counterfeiting. Both bureaus operate on a self-funding basis, largely covering their own costs through the value of the currency and coins they produce.

Coins have periodically cost more to make than they are worth: the Mint has reported that producing a penny costs several cents and a nickel more than a dime, prompting years of proposals to stop minting the one-cent coin, as Canada did in 2012; Treasury ended penny production in 2025.

The Mint keeps the difference between a coin's face value and its production cost, a profit called seigniorage that it returns to the Treasury general fund, historically several hundred million dollars a year. Fort Knox holds roughly 147 million ounces of gold, about half the government's total, and has had no full public audit since 1953.

OFAC administers and enforces U.S. economic and trade sanctions programs against targeted foreign countries, regimes, terrorist organizations, and drug traffickers. It maintains the Specially Designated Nationals list, which blocks designated individuals and entities from accessing the U.S. financial system.

OFAC's sanctions have become one of the U.S. government's primary non-military foreign policy tools in recent decades, used extensively against Russia following its 2022 invasion of Ukraine, against Iran's nuclear and missile programs, and against North Korea.

The office traces to the World War II-era Office of Foreign Funds Control, which froze Axis-country assets, and took its current form in 1950 to block Chinese and North Korean assets during the Korean War. Its authority rests largely on the International Emergency Economic Powers Act of 1977.

OFAC can fine or prosecute U.S. companies and, in effect, foreign banks that violate sanctions; penalties have reached into the billions of dollars for large European banks that processed transactions for sanctioned countries. Critics argue aggressive use of the dollar system is pushing some governments toward alternative payment channels.

FinCEN collects and analyzes financial transaction data to combat money laundering, terrorist financing, and other financial crimes. Banks and other financial institutions are legally required to report suspicious transactions to FinCEN, which shares that intelligence with law enforcement agencies across the federal government.

FinCEN also administers the Bank Secrecy Act, the primary federal anti-money-laundering law, and since 2024 has implemented new beneficial ownership reporting requirements aimed at unmasking the real people behind anonymous shell companies used to hide illicit finances.

Financial institutions file millions of Suspicious Activity Reports and Currency Transaction Reports (for cash movements over $10,000) each year. FinCEN itself has only a few hundred employees and acts mainly as an intelligence hub rather than an investigative agency.

The Corporate Transparency Act's beneficial-ownership registry, meant to end anonymous shell companies, was scaled back in 2025 after court challenges and a Treasury decision to exempt most U.S. companies, leaving the requirement to apply mainly to foreign-owned entities.

Hamilton's plan for the federal government to assume Revolutionary War debts incurred by the states was one of the most consequential financial decisions in early American history, establishing the credibility of the new federal government's credit in international markets.

The plan was deeply controversial, pitting states like Massachusetts that had large outstanding debts against states like Virginia that had already paid theirs off, and its passage required a political deal that also decided the permanent location of the national capital.

The bargain was struck at a June 1790 dinner Thomas Jefferson hosted for Hamilton and James Madison: the Southern states would allow assumption to pass, and in return the permanent capital would be built on the Potomac rather than remain in Philadelphia or New York.

Hamilton paired assumption with a plan to fund the combined national debt with reliable tax revenue and a national bank. The result was that U.S. bonds soon traded at or above face value in Europe, giving the young country the borrowing capacity it would need in later crises.

In August 1971, President Nixon, acting through Treasury, ended the direct convertibility of the U.S. dollar into gold, a move known as the 'Nixon Shock' that effectively ended the Bretton Woods international monetary system established after World War II.

The decision moved the world's major currencies to a floating exchange rate system that persists today, fundamentally changing how Treasury and the Federal Reserve manage the dollar's value and America's role in the global financial system.

By 1971 foreign governments held far more dollars than the United States could redeem for gold at the fixed $35-an-ounce rate, and countries such as France were converting dollars to bullion. Nixon closed the "gold window" and simultaneously imposed wage and price controls and an import surcharge.

The 1944 Bretton Woods conference had also created the International Monetary Fund and the World Bank, both of which Treasury still represents the United States at. Even off the gold standard, the dollar remained the world's dominant reserve currency and the unit for pricing oil and most commodities.

Because Congress separately caps how much the federal government may legally borrow, Treasury periodically finds itself managing the government's finances under a statutory debt ceiling that Congress has not yet raised, most notably during standoffs in 2011, 2013, 2021, and 2023.

When the ceiling is not raised in time, Treasury uses accounting maneuvers known as 'extraordinary measures' to keep paying the government's bills, a practice that has become a recurring flashpoint in Washington and, in 2011, triggered the first-ever downgrade of the United States' top-tier credit rating.

The ceiling has existed since 1917, when Congress stopped approving each bond issue individually, and has been raised, extended, or suspended roughly 100 times. Raising it does not authorize new spending; it lets Treasury borrow to pay for spending Congress has already approved.

Treasury has never actually missed a payment on the debt, but the 2011 and 2023 fights each came within days of a projected "X-date," and all three major credit agencies, S&P in 2011, Fitch in 2023, and Moody's in 2025, cited the brinkmanship as a reason for stripping the U.S. of a top rating.

Treasury issues a range of debt securities, from short-term Treasury bills to 30-year bonds, that finance the federal government's borrowing needs and are widely considered among the safest investments in the world. Individual investors can also buy Series I and EE savings bonds directly through TreasuryDirect.gov.

These securities form the backbone of the global financial system, since Treasury bonds are held as reserve assets by foreign central banks and used as the benchmark 'risk-free rate' against which nearly every other financial asset in the world is priced.

Treasury sells new securities through regular auctions run by the Federal Reserve Bank of New York, tens of trillions of dollars' worth a year counting the constant rollover of maturing debt. About a quarter of the publicly held debt is owned by foreign governments and investors, led historically by Japan and China.

Series I savings bonds, whose rate is tied to inflation, drew a surge of buyers in 2022 when the rate briefly exceeded 9 percent, overwhelming the aging TreasuryDirect website. Savings bonds are a small slice of federal borrowing but a long-running way for ordinary households to lend directly to the government.

Through the IRS, Treasury administers refundable tax credits such as the Earned Income Tax Credit and the Child Tax Credit, which reduce a filer's tax bill and, if the credit exceeds what they owe, pay out the difference as a refund, functioning as one of the largest anti-poverty programs in the federal government.

The IRS issues more than $300 billion in individual tax refunds each year, and for many lower-income families, the tax refund season represents the single largest cash infusion they receive all year.

The EITC alone delivers roughly $60 billion a year to about 23 million households, and research has linked it to increased work among single parents and to better birth and school outcomes for children in recipient families. It also has a relatively high improper-payment rate, largely from complex eligibility rules rather than fraud.

During downturns, Treasury and the IRS become the government's fastest delivery channel for aid: the 2020 and 2021 economic-impact payments and the temporarily expanded, monthly Child Tax Credit of 2021 were paid out directly through the tax system to most American households.

The CDFI Fund provides grants and tax credits to specialized banks, credit unions, and loan funds that serve low-income communities often overlooked by traditional banks, helping finance small businesses, affordable housing, and community facilities in underserved areas.

Since its creation in 1994, the CDFI Fund has certified more than 1,400 community development financial institutions across the country, channeling billions of dollars in private capital toward economically distressed communities.

Its largest tool is the New Markets Tax Credit, which gives investors a credit worth 39 percent of an investment over seven years for projects in low-income census tracts; Congress has authorized tens of billions of dollars in credit allocation since 2000.

The fund is small relative to Treasury's other work, a few hundred million dollars a year, but it is one of the department's few direct community-level programs, and CDFIs played an outsized role in distributing pandemic-era Paycheck Protection Program loans to the smallest businesses.

Treasury's sanctions programs, run primarily through OFAC, block designated individuals, companies, and even entire economic sectors of targeted countries from accessing U.S. dollars and the American financial system, one of the most powerful non-military levers the U.S. government has over foreign adversaries.

Because so much of global trade is denominated in U.S. dollars, even foreign banks with no U.S. operations often comply with Treasury sanctions to avoid being cut off from dollar-clearing systems, giving American sanctions global reach far beyond U.S. borders.

The SDN list has grown to well over 10,000 entries, and post-2022 measures on Russia went further than any prior program, freezing about $300 billion in central-bank reserves held abroad and, with allies, setting a price cap on Russian seaborne oil enforced through Western shipping and insurance.

Analysts debate how well broad sanctions change government behavior; targeted "smart" sanctions on individuals and firms are generally seen as more precise. Treasury periodically issues general licenses to permit humanitarian trade, food, and medicine even with heavily sanctioned countries.