What is an Enrolled Agent?
An Enrolled Agent (EA) is an individual who has demonstrated technical
competence in the field of taxation. Enrolled Agents, or EAs, can represent
taxpayers before all administrative levels of the Internal Revenue Service.
What does the term "Enrolled Agent" mean?
"Enrolled" means EAs are licensed 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. EAs' expertise
in the continually changing field of tax law 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 designation is earned in one of two ways: (1) an individual must pass
a difficult two-day examination administered by the IRS which covers
taxation of individuals, corporations, partnerships, estates and trusts,
procedures and ethics. Next, successful candidates are subjected to a
rigorous back ground check conducted by the Internal Revenue Service; or (2)
an individual may become an EA based on employment at the Internal Revenue
Service for a minimum of five years in a job where he/she regularly applied
and interpreted the provisions of the Internal Revenue Code and regulations.
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 three years, to maintain their status. Because of the difficulty in
becoming an Enrolled Agent and keeping up the required credentials, there
are fewer than 35,000 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 organization of and for 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 are required to complete a minimum of 30
hours of continuing professional education each year in the interpretation,
application and administration of federal and state tax laws in order to
maintain membership in the organization. This requirement surpasses the IRS'
required minimum of 16 hours per year.
How can I find an EA?
The ability to locate an EA in your local area is as close as your computer,
your telephone or your mailbox. You can search our website 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 at any time. You can
also call the NAEA 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
designation.
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 where 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. The new privilege does not apply to
state tax matters, although a number of states have an accountant-client
privilege.
