In Canada, the equivalent of the Internal Revenue Service (IRS)—which operates in the United States—is the Canada Revenue Agency (CRA). While the IRS is the U.S. federal agency responsible for tax collection and enforcement, Canadian residents and businesses deal directly with the CRA for all federal tax matters.

However, the IRS is still relevant to Canadians who have U.S. tax obligations. For example, U.S. citizens living in Canada, dual citizens, or Canadians who earn income from U.S. sources (such as rental property or investments) may be required to file U.S. tax returns with the IRS. The U.S. has a citizenship-based taxation system, meaning U.S. citizens must file taxes even if they live abroad.

Canada and the U.S. have a tax treaty designed to prevent double taxation. It outlines which country has the right to tax specific types of income and allows taxpayers to claim foreign tax credits. In many cases, this treaty ensures that income is not taxed twice.

In summary, while Canadian residents primarily interact with the CRA, those with ties to the U.S. may also need to comply with IRS regulations. Understanding the role of the IRS is crucial for cross-border taxpayers and international business activities.