Enrolled Agents: The Tax Professionals
WHAT IS AN ENROLLED AGENT?
An enrolled agent (EA) is a federally licensed tax practitioner who has technical expertise in the field of taxation and is empowered by the U.S Department of the Treasury to represent taxpayers for audits, collections and appeals before all administrative levels of the Internal Revenue Service.
WHAT ARE THE DIFFERENCES BETWEEN ENROLLED AGENTS AND OTHER TAX PREPARERS?
Only enrolled agents demonstrate their competence in matters of taxation and report their hours of continuing professional education to IRS. Enrolled agents are the only taxpayer representatives who receive their right to practice directly from the U.S. government (certified public accountants and attorneys are licensed by states and their licenses are state specific). Unlike attorneys and certified public accountants, who may or may not choose to focus on taxes, all enrolled agents specialize in taxation.
HOW CAN AN ENROLLED AGENT HELP ME?
Enrolled agents advise, represent and prepare tax returns for individuals, partnerships, corporations, estates, trusts and any other entity with tax-reporting requirements. Enrolled agents prepare millions of tax returns each year. Enrolled agents’ expertise in the continually changing field of taxation enables them to effectively represent taxpayers audited by IRS.
Some enrolled agents work only during tax season or by appointment only, while other enrolled agents have year-round practices. In addition to tax preparation and tax representation, many enrolled agents offer other business-related services which may include:
- Accounting and bookkeeping
- Financial planning or budgeting
- Payroll services
- Financial statement preparation
ARE ENROLLED AGENTS REQUIRED TO TAKE CONTINUING PROFESSIONAL EDUCATION?
In addition to the stringent testing and application process, IRS requires enrolled agents to complete 72 hours of continuing professional education every three years to maintain their licenses. NAEA members are obligated to complete 90 hours in each three year period.
ARE ENROLLED AGENTS BOUND BY ETHICAL STANDARDS?
Yes, Enrolled agents are required to abide by the provisions of the Treasury Department’s Circular 230 which provides the regulations governing the practice of enrolled agents before the IRS. NAEA members are also bound by a code of ethics and rules of professional conduct.
PRIVILEGE AND THE ENROLLED AGENT
The IRS Restructuring and Reform Act of 1998 allow federally authorized practitioners (those bound by U.S. Department of the Treasury Circular 230 regulations) a limited client privilege. This privilege allows confidentiality between the taxpayer and the enrolled agent under certain conditions. The privilege applies to situations in which the taxpayer is being represented in cases involving audits and collection matters. It is not applicable to the preparation and filing of a tax return. This privilege does not apply to state tax matters, although a number of states have an accountant-client privilege.
