What is an enrolled agent?
Enrolled agents (EAs) are America’s tax experts. They are the only federally-licensed tax practitioners who both specialize in taxation and have unlimited rights to represent taxpayers before the Internal Revenue Service. These tax specialists have earned the privilege of representing taxpayers before the IRS by either passing a stringent and comprehensive three-part examination covering individual tax returns, business tax returns and representation, practice and procedure, or through experience as a former IRS employee. All candidates are subjected to a suitability check conducted by the IRS.
What are the differences between enrolled agents and other tax professionals?
The enrolled agent is the most expansive license IRS grants a tax professional. Enrolled agents are generally unrestricted as to which taxpayers they can represent, what types of tax matters they can handle, and the IRS offices before which they practice.
Unlike attorneys and CPAs, who may or may not choose to specialize in taxes, all enrolled agents specialize in taxation. While CPAs and attorneys are licensed by the states, enrolled agents and registered tax return preparers are federally licensed. Registered tax return preparers must pass a basic, one-part exam and complete a minimal 15 hours of continuing education per year. They do not have the unlimited representation rights held by enrolled agents, CPAs and attorneys.
What is Representation?
Taxpayers who find themselves in tax trouble are allowed to represent themselves before the various administrative levels of the IRS. However, most taxpayers facing IRS collection action, an IRS audit of any sort (whether IRS asks for mounds of documents by mail or requests an in-person examination), or an appeal of any collection or examination action would be wise to send in an expert in his or her place. Taxpayers who are represented have a guide through the process, and someone authorized to speak on his or her behalf (and in his or her place) and ensure the matter is settled fairly. Enrolled agents are authorized by IRS to represent taxpayers before IRS; every enrolled agent has passed testing on representation.
The enrolled agent license is the highest credential the IRS issues.
The advantage of working with an enrolled agent lies not only in the depth of experience and understanding of how to prepare a tax return, but the knowledge of tax law that may be used to represent taxpayers before the IRS. If you get a letter from the IRS, or worse, are audited or are the target of a collection action, your EA can speak directly to the IRS on your behalf.
How can an enrolled agent help me?
Enrolled agents advise, represent and prepare the tax returns of individuals, partnerships, corporations, estates, trusts and any other entity with tax reporting requirements. EAs prepare millions of tax returns each year and their expertise in the continually changing field of taxation enables them to effectively represent taxpayers audited by the IRS. In addition to tax preparation and tax representation, many enrolled agents offer other business-related services which may include:
• Financial planning or budgeting
• Payroll services
• Financial statement preparation
• Mortgage assistance
Because enrolled agents have such diverse backgrounds and may offer a variety of services, it is important to talk with your enrolled agent about how his/her expertise may assist you.
Are enrolled agents required to take continuing professional education?
In addition to the stringent testing and application process, the IRS requires enrolled agents to complete 72 hours of continuing education every three years to maintain their licenses.