What Is An Enrolled Agent?
Enrolled Agents are America’s tax experts. According to the IRS:
An enrolled agent is a person who has earned the privilege of representing taxpayers before the Internal Revenue Service by either passing a three-part comprehensive IRS test covering individual and business tax returns, or through experience as a former IRS employee. Enrolled agent status is the highest credential the IRS awards. Individuals who obtain this elite status must adhere to ethical standards and complete 72 hours of continuing education courses every three years.
Enrolled agents, like attorneys and certified public accountants (CPAs), have unlimited practice rights. This means they are unrestricted as to which taxpayers they can represent, what types of tax matters they can handle, and which IRS offices they can represent clients before.
Most people know, filing your own tax returns can be a complex and tedious process. This is especially true if you are a business owner, independent contractor, or need to itemize your deductions one by one. Luckily, working with an experienced tax preparer or financial advisor can help you to navigate this difficult process in order to get the best results in your filing.
It is important to choose a qualified tax professional for your tax issue. Not all tax professionals have the same background, knowledge, expertise, or privilege. Enrolled agents have very few restrictions when working with their clients. Enrolled agent status is the highest credential you can receive from the IRS, and gives them unique powers when it comes to the tax preparation process.
They are able to represent clients in any state and can communicate directly with the IRS on their client’s behalf. This can make it simple for individuals in difficult circumstances. If you need help with your individual or business taxes, an EA can help you.
What Does an Enrolled Agent Do?
Enrolled agents represent taxpayers before the IRS at all administrative levels (examinations, collections and appeals). This means, if you have a tax issue, a notice from the IRS or are currently being audited, you can work with an enrolled agent to handle all direct interactions with the IRS, provide information and explanations on your behalf, and enter into an agreement with the IRS.
The only tax issues an enrolled agent cannot represent you for, are ones that take place in tax court. In order to represent a taxpayer in tax court, you must be a licensed attorney or have passed the “U.S. Tax Court Non-Attorney” exam. Your enrolled agent can help you find a professional to help you in tax court, if you are in that position.
Additionally, enrolled agents are authorized to advise and prepare tax returns for individuals, partnerships, corporations, estates, trusts or any other entities with tax-reporting requirements. In fact, enrolled agents are the only federally licensed tax practitioners who specialize in taxation and have unlimited rights to represent taxpayers before the IRS.
Enrolled agents have privilege with the taxpayers they represent, under certain conditions. This privilege allows for confidentiality between the enrolled agent and taxpayer in circumstances where the taxpayer is being represented in situations involving audits and debt collection. It is important to note, this privilege does not apply to the preparation and filing of a tax return, and does not apply to state tax matters.
Enrolled Agent vs. Other Tax Professionals
One of the most obvious differences between EAs and other tax professionals is the process to become certified. There are two different ways an individual can become an EA. The first way is to work for the IRS in a position that requires you to interpret the tax code. The other, more frequently utilized path, is to pass the Special Enrollment Exam (SEE) and a background check.
The SEE is a three-part exam the IRS administers directly. It covers tax concerns for individuals and businesses as well as other practices and procedures. You do not need a college degree or any speciality schooling in order to take the exam.
Another major difference between EAs and other tax professionals is their unlimited practices. EAs are able to represent anyone on any matter relating to taxation, collection or appeals. The only other professional with representation freedom like this is a certified public accountant (CPA). EAs also have federal licenses, which means they can represent clients in any state or US territory.
How to Become an Enrolled Agent
To become an enrolled agent, you can either work directly for the IRS for 5+ years or pass all parts of a test called the Special Enrollment Exam (SEE). EAs are also required to complete continuing education credentials . To maintain EA status, you must complete 72 hours of continuing education every three years.
TxSEA makes it easy for enrolled agents in Texas to stay on top of these credits and network with other EAs in their area. Do not fall behind on your education, stay on track with TxSEA.