The IRS collects federal tax and enforces the Internal Revenue Code. For traders its most visible role is matching: brokers report your proceeds and often your basis on form-1099-b, and the agency compares those figures with your return. Mismatches generate automated notices long before any human reviews the file.
It also decides, through regulations, rulings and audits, how trading-specific provisions are applied: the wash-sale-rule, straddle-rules, the section-475-election, and whether someone qualifies for trader-tax-status.
This entry and every tax entry here is general information, not tax advice. Rules change, guidance is revised, and the right answer depends on your own circumstances and jurisdiction, so confirm with a qualified professional.
Related: wash-sale-rule