What Is a Taxpayer?

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A taxpayer is any individual or entity such as a trust or a corporation that is subject to taxation. Taxpayers may be subject to federal income tax, state income tax, sales tax, or any other type of tax.

Key Takeaways

  • A taxpayer is an individual or entity subject to certain types of taxes, such as federal or state income tax, sales tax, or property tax.
  • While tax codes and similar documents might refer to a taxpayer as a “person,” that word can mean an individual person as well as corporations or estates.
  • Being a taxpayer often means using a tax identification number. In some cases, such as for U.S. citizens paying taxes as individuals, that’s a Social Security number. In other cases, such as for corporations, an employer identification number could be used.

How Being a Taxpayer Works

Anyone subject to taxes is a taxpayer, including individuals and entities like businesses.

Taxpayers must meet certain requirements to pay taxes, which can vary depending on the type of tax. For example, to potentially qualify as a taxpayer of federal income tax in the U.S., you simply have to earn wages, even if you’re not a citizen.

It’s possible that you may not owe any federal income tax because you didn't earn enough. However, you could still be considered a taxpayer if you pay other forms of tax. For example, when you buy gasoline, you generally pay an excise tax. Homeowners often pay property tax based on the value of their home.


When an individual or an entity is a federal taxpayer, they have or need to obtain a taxpayer identification number. An individual U.S. citizen, for example, can use their Social Security number as their taxpayer identification number. Individuals who can’t get a Social Security number, such as those who are not citizens, can obtain an individual taxpayer identification number. Businesses that are taxpayers can obtain an employer identification number (EIN), as can other entities such as estates and trusts that have tax obligations.

Taxpayers typically end up owing taxes to the IRS or the IRS owes the taxpayer a refund because the taxpayer paid more taxes than they should. If a taxpayer chooses not to pay the taxes they owe, they'll likely face penalties and fees. Taxpayers who willfully provide false information to the IRS can be charged with tax fraud and face multiple years in jail and fines.

Examples of a Taxpayer

An individual who files the standard Form 1040 to report their federal income tax liability is a taxpayer. That individual could also lead a corporation that also counts as a taxpayer and files a separate tax return.

In other cases, however, a taxpayer might be an individual and business owner who only files one tax return. For example, a single-member LLC founder or a sole proprietor could elect to have their business be considered a “disregarded entity,” meaning only the individual is the taxpayer. The owner would report their business income on their personal income tax return.

What Being a Taxpayer Means for Individuals

Being a taxpayer also often means you’re entitled to a taxpayer bill of rights, such as those from the IRS or from state tax authorities. For example, the IRS declares in its Taxpayer Bill of Rights that taxpayers have the right to pay no more than the correct amount of tax. For example, if more tax is withheld from your paycheck than you actually owe, you’ll receive a tax refund.

This type of right to not overpay can also apply to situations such as paying an incorrect amount of sales tax. New York State, for example, notes that you might be eligible for a refund in situations where you paid sales or use tax when you didn't need to.

Frequently Asked Questions (FAQs)

What is considered a taxpayer?

A taxpayer is anyone who is subject to taxes, which includes those who owe taxes and those who get a refund. In general, there are two types of taxpayers: individuals and corporations.

What is your role as a taxpayer?

Generally speaking, a taxpayer's role is to file their tax return in a timely manner and pay any taxes owed from the previous tax year or years.

Does everyone have to pay taxes?

No, not everyone has to pay taxes. Those who earn less than their standard deduction amount typically don't have any tax liability, as their deduction would reduce their taxable income to $0, and may even result in a tax refund.

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The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. U.S. Government Publishing Office. “Title 26: Internal Revenue Code.”

  2. IRS. "Taxpayer Identification Numbers (TIN)."

  3. IRS. “Taxpayer Bill of Rights,” see “The Right To Pay No More than the Correct Amount of Tax.”

  4. New York State Department of Taxation and Finance. “How To Apply for a Refund of Sales and Use Tax.”

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