text: i had heard that the irs is not a government agency and that its employees are civilian, is this true? i searched the best i could and found one website that says it is not a branch of government, i had heard this on the news one morning, but several people who live near me insist that it is owned, run and employed by the federal government.  which is it? the internal revenue service is a branch of the government ... part of the treasury department.  it's employees are referred to as civil servants and their pay grades are gs## (such as gs7, gs13, etc.) ... the gs stands for general service ... they do not hold military rank, but are employees of the federal government.  the irs is funded by the treasury department (a cabinet-level arm of the executive branch).  the irs is about as government as you can get outside of the supreme court, congress and the military.  update:  at the expense of a couple of points here (who really cares anyway) ... i happened to think ... "maybe she's referring to the federal reserve?"  the federal reserve is not part of the us government.  look at a dollar bill or any us paper currency ... they are "federal reserve notes" ...   the federal reserve is actually privately owned ... banks, to meet their federally mandated laws regarding reserve requirements, must hold a certain amount (based on the bank's assets) of federal reserve stock ... the federal reserve (the root of the us banking industry) is wholely and completely a private organization ... obviously endorsed by the government, but technically, it's privately owned.  the details and history of this are far to complicated to mention here ... i'd be happy to discuss it with you through other means (im, email, etc.), and it's surprisingly interesting to most folks.