A tax authority is a government agency responsible for administering and enforcing tax laws. This organization collects taxes from individuals and businesses, ensuring compliance with tax regulations. It also provides guidance on tax obligations and processes tax returns. Tax authorities play a crucial role in funding public services, such as education, healthcare, and infrastructure. They may conduct audits to verify tax compliance and can impose penalties for tax evasion. Examples of tax authorities include the Internal Revenue Service (IRS) in the United States and HM Revenue and Customs (HMRC) in the United Kingdom.