The Internal Revenue Service (IRS) is the federal agency responsible for tax collection and enforcing U.S. tax laws. It handles everything from processing income tax returns to auditing individuals and businesses. While it plays a huge role in personal finance, the IRS does not insure your bank deposits. Its primary concern is ensuring that taxpayers meet their obligations — not providing protection against bank failures. That responsibility belongs to the FDIC, which insures up to $250,000 per depositor at insured banks. The confusion may arise because taxes and banking are both tied to financial health, but their functions are very different. The IRS can seize assets or issue refunds based on tax filings, but it will not reimburse you if your bank goes under. Understanding each agency’s function is crucial to managing finances confidently and accurately.