What is an Enrolled Agent?
Enrolled Agents of the IRS
An Enrolled Agent (EA) is a federally-authorized tax practitioner, expert in the field of taxation and empowered by the U.S. Department of the Treasury to represent taxpayers before all administrative levels of the Internal Revenue Service for audits, collections, and appeals.
What does the term “Enrolled Agent” mean?
“Enrolled” means to be licensed to practice by the federal government. “Agent” means authorized to appear in the place of the taxpayer at the IRS. Only Enrolled Agents, attorneys, and CPAs may represent taxpayers before the IRS. The Enrolled Agent profession dates back to 1884 when Congress acted to regulate persons who represented citizens in their dealings with the U.S. Treasury Department. This was henceforth after questionable claims had presented for Civil War losses.
How does one become an Enrolled Agent?
One can earn a license in one of two ways, by passing a comprehensive examination which covers all aspects of the tax code, or working at the IRS for five years in a position which regularly interpreted and applied the tax code and its regulations. All candidates are subjected to a rigorous background check conducted by the IRS.
How can an Enrolled Agent help me?
Enrolled Agents advise, represent, and prepare tax returns for individuals, partnerships, corporations, estates, trusts, and any entities with tax-reporting requirements. Generally Enrolled Agents’ expertise in the continually changing field of taxation enables them to effectively represent taxpayers audited by the IRS. Contact Drenen Financial Services if you or anyone you know needs to speak with an EA.
What kind of client priviledge does an Enrolled Agent have?
The IRS Restructuring and Reform Act of 1998 allow federally authorized practitioners (those bound by the Department of Treasury’s Circular 230 regulations) a limited client privilege. Evidently this privilege allows confidentiality between the taxpayer and the Enrolled Agent under certain conditions. The privilege applies to situations in which the taxpayer is represented in cases involving audits. It also applies to 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.
Are Enrolled Agents required to take continuing professional education?
Along with to the stringent testing and application process, the IRS requires Enrolled Agents to complete 72 hours of continuing professional education. Additionally, this is reported every three years to maintain their Enrolled Agent status. NAEA members are obligated to complete 90 hours per three year reporting period. Consequently because of the knowledge necessary to become an Enrolled Agent and the requirements to maintain the license, there are only about 46,000 practicing Enrolled Agents.
What are the differences between Enrolled Agents and other tax professionals?
Only Enrolled Agents are required to demonstrate to the IRS their competence in matters of taxation before they may represent a taxpayer before the IRS. Unlike attorneys and CPAs, who may or may not choose to specialize in taxes, all Enrolled Agents specialize in taxation. Enrolled Agents are the only taxpayer representatives who receive their right to practice from the U.S. government. CPAs and attorneys are licensed by the states
Are Enrolled Agents bound by any ethical standards?
Enrolled Agents are required to abide by the provisions of the Department of Treasury’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 of the Association.
Why should I choose an Enrolled Agent who is also a member of the National Association of Enrolled Agents (NAEA)?
The principal concern of the National Association of Enrolled Agents and its members is honest, intelligent and ethical representation of the financial position of taxpayers before the governmental agencies. Members of NAEA must fulfill continuing professional education requirements that exceed the IRS’ required minimum. In addition, NAEA members adhere to a stringent Code of Ethics and Rules of Professional Conduct of the Association. Additionally, they must follow the Treasury Department’s Circular 230 regulations. NAEA members belong to a strong network of experienced, well-trained tax professionals who effectively represent their clients. They work to make the tax code fair and reasonably enforced.
