What is an Enrolled Agent?
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An Enrolled Agent (EA) is a Federally Authorized Tax Practitioner who has technical expertise in the field of taxation and who is empowered by the United States 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 EAs are licensed to practice by the federal government. "Agent" means EAs are authorized to appear in place of the taxpayer at the Internal Revenue Service. Only EAs, attorneys, and CPAs may represent taxpayers before the IRS. The Enrolled Agent profession dates back to 1884 when, after questionable claims had been presented for Civil War losses, Congress acted to regulate persons who represented citizens in their dealings with the Treasury Department.
How can an Enrolled Agent help me?
EAs advise, represent, and prepare tax returns for individuals, partnerships, corporations, estates, trusts, and any entities with tax reporting requirements. EAs 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 the IRS.
What are the differences between EAs and other tax professionals?
Only Enrolled Agents are required to demonstrate to the Internal Revenue Service 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 EAs specialize in taxation. EAs are the only taxpayer representatives who receive their right to practice from the United States government. (CPAs and attorneys are licensed by the states.)
How does one become an Enrolled Agent?
The EA credential is earned in one of two ways: An individual must pass a difficult 2-day examination administered by the IRS which covers taxation of individuals, corporations, partnerships, estates and trusts, procedures and ethics. Or alternatively, an individual may become an EA based on employment at the Internal Revenue Service for a minimum of 5 years in a position where he or she regularly applied and interpreted the provisions of the Internal Revenue Code and its regulations. All candidates are subjected to a rigorous background check conducted by the Internal Revenue Service.
Are EAs required to take continuing professional education?
In addition to the stringent testing and application process, EAs are required to complete 72 hours of continuing professional education, reported every 3 years, to maintain their status. Because of the difficulty in becoming an Enrolled Agent and keeping up the required credentials, there are approximately 30,000 active EAs in the United States.
Are Enrolled Agents bound by any ethical standards?
EAs are required to abide by the provisions of U.S. Treasury Department Circular 230. EAs found to be in violation of the provisions contained in Circular 230 may be suspended or disbarred.
Why should I choose an EA who is a Member of the National Association of Enrolled Agents (NAEA)?
NAEA is the professional society of Enrolled Agents. The principal concern of the association and its Members is honest, intelligent, and ethical representation of the financial position of taxpayers before governmental agencies. Members of NAEA must fulfill continuing professional education requirements that exceed the IRS required minimum. Continuing professional education must be reported every 3 years and NAEA Members must complete a minimum of 90 hours of education in the interpretation, application, and administration of federal and state laws in order to maintain membership in the organization.
How can I find an EA?
Locating an EA in your area is as close as your computer, your telephone, or your mailbox. You can search our Web site at www.naea.org. Click on "Find a Tax Advisor" and then search first by state and then by zip code. This is an instant referral service available 24 hours a day, 7 days a week. You can also call NAEA's 24-hour referral service at 800-424-4339 (7 days a week) or write the National Association of Enrolled Agents. You will be sent a list of names and addresses of Members located in your area. Many EAs are listed in the Yellow Pages under "Tax Preparation." Look for the words Enrolled Agent, Enrolled to Represent Taxpayers Before the IRS, and the EA credential.
Privilege and the Enrolled Agent
The IRS Restructuring and Reform Act of 1998 allows federally authorized practitioners (those bound by the previously mentioned Circular 230) 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.