NOTES TO THE FINANCIAL STATEMENTS 116

Note 17. Collections and Refunds of Federal Revenue

Collections of Federal Tax Revenue for the Year Ended September 30, 2019 

Federal Tax Year to Which Collections Relate 

Tax 

 Revenue Prior 

(In billions of dollars) Collections 2019 2018 2017 Years 

Individual income tax and tax 

withholdings .................................. 3,176.4 2,023.0 1,087.9 37.3 28.2 

Corporate income taxes ................. 277.1 181.6 85.3 4.1 6.1 

Excise taxes .................................. 105.0 69.6 35.0 0.1 0.3 

Unemployment taxes ..................... 39.6 33.0 6.5 - 0.1 

Customs duties .............................. 74.8 74.8 - - - 

Estate and gift taxes ....................... 17.6 0.8 13.7 1.5 1.6 

Railroad retirement taxes ................ 6.2 4.8 1.4 - - 

Fines, penalties, interest, and other 

revenue ......................................... 7.4 7.4 - - - 

 Subtotal 3,704.1 2,395.0 1,229.8 43.0 36.3 

Less: amounts collected for nonfederal entities ............................... (0.5)

 Total ............................................ 3,703.6 

Treasury is the government’s principal revenue-collecting entity. Collections of individual income and tax withholdings 

include FICA/SECA and individual income taxes. These taxes are characterized as non-exchange revenue. 

Excise taxes, also characterized as non-exchange revenue, consist of taxes collected for various items, such as airline 

tickets, gasoline products, distilled spirits and imported liquor, tobacco, firearms, and others. 

Tax and other revenues reported reflect the effects of tax expenditures, which are special exclusions, exemptions, 

deductions, tax credits, preferential tax rates, and tax deferrals that allow individuals and businesses to reduce taxes they may 

otherwise owe. The Congressional Budget Act of 1974 (P.L. 93-344 or Budget Act) requires that a list of tax expenditures be 

included in the annual Budget. Tax expenditures may be viewed as alternatives to other policy instruments, such as spending 

or regulatory programs. For example, the government supports college attendance through both spending programs and tax 

expenditures. The government uses Pell Grants to help low- and moderate-income students afford college and allows certain 

funds used to meet college expenses to grow tax free in special college savings accounts. 

Tax expenditures include deductions and exclusions, which reduce the amount of income subject to tax. Examples are 

the deduction for mortgage interest on personal residences and the exclusion of interest on state and local bonds. Tax 

expenditures also include tax credits, which reduce tax liability dollar for dollar for the amount of credit. For example, the 

child tax credit reduces liability by $2,000 per child for taxpayers eligible to use it fully. Other credits are targeted at business 

activity, such as credits for producing electricity from renewable energy or the research and experimentation credit, which 

encourages businesses in the U.S. to increase investment in research activities. In addition, tax expenditures include some 

provisions that allow taxpayers to defer tax liability. Examples include provisions that allow immediate expensing or 

accelerated depreciation of certain capital investments, and others that allow taxpayers to defer their tax liability, such as the 

deferral of recognition of income on contributions to and income accrued within qualified retirement plans. 

The Total Revenues reported in the Statement of Operations and Changes in Net Position and the related information 

reported in this note, do not include explicit line items for tax expenditures, but the total revenue amounts and budget results 

reflect the effect of these expenditures. Tax expenditures are discussed in this note, the unaudited MD&A, and in the 

unaudited Other Information section of the Financial Report. 

  
 117 NOTES TO THE FINANCIAL STATEMENTS

Federal Tax Refunds Disbursed for the Year Ended September 30, 2019 

Tax Year to Which Refunds Relate 

Refunds Prior 

(In billions of dollars) Disbursed 2019 2018 2017 Years 

Individual income tax and tax 

withholdings .......................................... 397.8 58.1 301.0 30.1 8.6 

Corporate income taxes ......................... 51.3 3.9 14.8 10.7 21.9 

Other taxes, fines, and penalties ............. 6.1 2.2 2.1 0.8 1.0 

Total .................................................. 455.2 64.2 317.9 41.6 31.5 

                         

Reconciliation of Revenue to Tax Collections for the Year 

Ended September 30, 2019, and 2018 

(In billions of dollars) 2019 2018 

Consolidated revenue per the Statement of Operations and Changes in Net 

Position ............................................................................................................ 3,621.0 3,384.3 

Tax refunds ...................................................................................................... 455.2 466.1 

Individual and other tax credits ........................................................................... (154.3) (134.0)

Federal Insurance Contributions Act - Tax .......................................................... 15.8 22.7 

Federal Reserve earnings ................................................................................. (52.8) (70.8)

Change in taxes receivable as it relates to Section 965(h) ................................... (85.9) - 

Nontax-related fines and penalties reported by entities ........................................ (80.0) (79.8)

Nontax-related earned revenue .......................................................................... (15.4) (13.8)

Collections of federal tax revenue ...................................................................... 3,703.6 3,574.7 

Consolidated revenue in the Statement of Operations and Changes in Net Position is presented on a modified cash basis, 

net of tax refunds, and includes other non-tax related revenue. There was a presentation change for 2018 and 2019 that 

replaced lines Earned income tax and child tax credit imputed revenue and Other tax credits and accrual adjustments with 

Individual and other tax credits. Individual and other tax credits amounts are included in gross cost in the Statements of Net 

Cost. Refer to Note 3—Accounts and Taxes Receivable, Net for further explanation of line Changes in taxes receivable as it 

relates to Section 965(h). The FICA – Tax paid by federal entities is included in the Individual income and tax withholdings 

line in the Collections of federal tax revenue; however, it is not reported on the Statement of Operations and Changes in Net 

Position as these collections are intragovernmental revenue and eliminated in consolidation. The table above reconciles total 

revenue to federal tax collections. 
NOTES TO THE FINANCIAL STATEMENTS 118

Collections of Federal Revenue for the Year Ended September 30, 2018 

Federal Tax Year to Which Collections Relate 

Tax 

 Revenue Prior 

(In billions of dollars) Collections 2018 2017 2016 Years 

Individual income tax and tax 

withholdings ...................................... 3,089.8 1,932.6 1,096.7 33.5 27.0 

Corporate income taxes ..................... 262.7 150.3 99.7 1.7 11.0 

Excise taxes ...................................... 98.5 73.3 24.9 0.1 0.2 

Unemployment taxes ......................... 43.4 34.1 9.1 0.1 0.1 

Customs duties .................................. 43.4 43.4 - - - 

Estate and gift taxes ........................... 23.9 0.1 20.9 1.1 1.8 

Railroad retirement taxes .................... 6.3 4.9 1.4 - - 

Fines, penalties, interest and other 

revenue ............................................ 7.2 7.1 0.1 - - 

 Subtotal .......................................... 3,575.2 2,245.8 1,252.8 36.5 40.1 

Less: amounts collected for nonfederal entities ................................... (0.5)

 Total ............................................... 3,574.7 

Federal Tax Refunds Disbursed for the Year Ended September 30, 2018 

Tax Year to Which Refunds Relate 

Refunds Prior 

(In billions of dollars) Disbursed 2018 2017 2016 Years 

Individual income tax and tax 

withholdings ........................................ 401.4 54.4 307.9 29.8 9.3 

Corporate income taxes ....................... 60.1 4.8 25.9 9.2 20.2 

Other taxes, fines, and penalties ........... 4.6 1.6 1.3 0.7 1.0 

 Total ................................................. 466.1 60.8 335.1 39.7 30.5