Legal Definitions - Treasury Department

The Treasury Department, officially known as the Department of the Treasury, is a vital executive department of the U.S. federal government. Its primary role is to manage the government's finances and revenue. This includes overseeing the nation's financial systems, collecting taxes, managing the national debt, issuing currency, and enforcing financial laws and sanctions. The Treasury Department works to maintain a strong economy and protect the integrity of the U.S. financial system.

Here are some examples illustrating the functions of the Treasury Department:

• Example 1: Managing Government Debt

  When the U.S. government decides to fund a new initiative, such as a nationwide clean energy program, it often needs to borrow money. The Treasury Department is responsible for issuing government securities, like Treasury bonds and bills, to raise these funds from investors. It then manages the national debt incurred from these borrowings, ensuring the government can meet its payment obligations to bondholders.

  This example demonstrates the Treasury Department's crucial role in managing the government's finances and the national debt, a core aspect of its mission to ensure fiscal stability.

• Example 2: Enforcing Financial Sanctions

  If a foreign entity is found to be engaging in illicit financial activities, such as funding terrorism or violating international sanctions, the Treasury Department's Office of Foreign Assets Control (OFAC) can impose economic sanctions. These sanctions might freeze the entity's assets within U.S. jurisdiction or prohibit American citizens and companies from doing business with them, aiming to disrupt their operations and protect U.S. national security.

  This illustrates the Treasury Department's responsibility for enforcing financial laws and implementing sanctions to safeguard the U.S. financial system and advance foreign policy objectives.

• Example 3: Tax Collection and Currency Issuance

  Every year, millions of Americans file their income tax returns with the Internal Revenue Service (IRS), which operates under the authority of the Treasury Department. The money collected through these taxes is a primary source of government revenue. Additionally, when you withdraw a twenty-dollar bill from an ATM, you are handling currency that was printed and issued by the U.S. Treasury, specifically through the Bureau of Engraving and Printing and the U.S. Mint, both agencies within the department.

  This example highlights two fundamental functions of the Treasury Department: collecting the revenue necessary to operate the government and ensuring the stability and availability of the nation's currency.