Enrolled Agents (EAs) are federally-licensed tax practitioners who may represent taxpayers before the IRS when it comes to collections, audits and appeals. As authorized by the Department of Treasury’s Circular 230 regulations, EAs are granted unlimited practice rights to represent taxpayers before IRS and are authorized to advise, represent, and prepare tax returns for individuals, partnerships, corporations, estates, trusts, and any entities with tax-reporting requirements. Enrolled agents are the only federally-licensed tax practitioners who specialize in taxation and have unlimited rights to 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 U.S. Treasury Department. Enrolled agents’ expertise in the continually changing field of taxation enables them to effectively represent taxpayers at all administrative levels within the IRS.
Privilege and the Enrolled Agent
The IRS Restructuring and Reform Act of 1998 provides federally-authorized practitioners (those bound by the Department of Treasury’s Circular 230 regulations) with 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.
The Differences Between Enrolled Agents and Other Tax Professionals
Only enrolled agents are required to demonstrate to the IRS their competence in all areas of taxation, representation and ethics before they are awarded unlimited representation rights to represent taxpayers before IRS. Unlike attorneys and CPAs, who are state-licensed and who may or may not choose to specialize in taxes, all enrolled agents specialize in taxation.
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.
Limitless Earning Potential
Because you’ll be a confirmed tax expert with unlimited rights before the IRS, you won’t have to turn down any chance to make money by supplying tax services. Instead, you can complete more complicated tax returns, which means you can increase your earning potential.
The services you can offer include helping people with audits, preparing and filing documents on a client’s behalf, attending hearings and conferences in place of your client, and providing written advice to third parties on the tax implications of business transactions.
These services are lucrative not only because they are vast, but also because they are in demand across all industries. All kinds of entities require the assistance of enrolled agents, such as accounting firms, law firms, investment firms, corporate accounting departments, state departments of revenue, banks, and private practices.
With so many work opportunities available, you’ll have the freedom to decide if you’d like to work full-time or part-time; year-round or just during busy season; for yourself or someone else. In fact, with the independence you’ll have to work as much as you like and on whatever kind of accounts you like, your earning potential is unlimited.
And don’t forget: On average, EAs earn about 10% more per return than an unenrolled tax preparer. As you can see from this chart, the more experience you acquire as an enrolled agent, the more money you can make.
Why Join TxSEA?
TxSEA makes it easy for enrolled agents in Texas to stay on top of the credits they need to maintain their licensing, as well as provides an opportunity for networking with other EAs in their local area. This can provide helpful information and leads to tax professionals working as enrolled agents today.