Why Choose an Enrolled Agent?

What are the differences between Enrolled Agents and other tax professionals:  An enrolled agent is the only professional granted a right to practice directly from the U.S. government. Attorneys and certified public accountants (CPA) have state licenses, which limits their practice only to the states where they are licensed. Unlike a CPA or Attorney, an enrolled agent holds a federal license and has the right to represent any taxpayer in any state regarding federal tax matters.

An enrolled agent is considered a tax specialist, which sets them apart from attorneys or CPA’s who do not always specialize in taxes. The practice of enrolled agents before the IRS is not limited and they may represent taxpayers before the IRS, performing the same tasks as an Attorney or CPA. The capabilities of an enrolled agent extend beyond just preparing returns to areas such as representing clients in cases involving audits, collections, and appeals.

What can an un-enrolled tax return preparer do for me?  An un‐enrolled return preparer may not sign documents for a taxpayer and may only represent taxpayers in limited situations before revenue agents and customer service representatives. An un‐enrolled preparer’s ability to practice before the IRS is very limited. Generally, it is limited to the examination function of the Service, and only with respect to a return he or she prepared. Consequently, an un‐enrolled preparer cannot practice before appeals officers, revenue officers, and Counsel. In addition, an un‐enrolled preparer cannot execute claims for refund, receive refund checks, execute consents to extend the statutory period for assessment or collection, execute closing agreements, or execute waivers of restriction on assessment or collection of a deficiency in tax.

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.  Enrolled Agents’ expertise in the continually changing field of taxation enables them to effectively represent taxpayers audited by the IRS.

Are Enrolled Agents required to take continuing professional education?  In addition to the stringent testing and application process, the IRS requires Enrolled Agents to complete 72 hours of continuing professional education, reported every three years, to maintain their Enrolled Agent status.  NAEA members are obligated to complete 90 hours per three year reporting period.  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.

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.

Privilege and the Enrolled Agent.  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.  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.

Do Enrolled Agents provide other services?  While many Enrolled Agents restrict their practices to tax preparation and representation, other Enrolled Agents hold additional professional designations.  Many Enrolled Agents provide year round tax planning as well as just tax preparation.  Some of our members provide financial planning and investment management, bookkeeping and payroll services, financial statement preparation and other accounting services, and fraud audits and investigations.

Why do you need an Enrolled Agent?

·                     IRS Examinations are up over 100% ‐ According to enforcement results published by the IRS in 2009, examinations of individual returns increased over 100% since year 2000. Throughout this period, the number of examinations rose every year through 2009. Current plans are for a substantial increase in examinations from present levels.

·                     Growing need for representation ‐ Given the state of our economy, many people now find themselves in a difficult position financially. As you might imagine, many are delinquent on their tax obligations. With IRS enforcement activities on the rise, there is a growing need for enrolled agents who can assist taxpayers in dealing with IRS collection activities.

In practice, you will find your Enrolled Agent to be a treasure hunter. (S)he is a professional whose love of dealing with taxes drives him/her to find money-saving tidbits in the tax law that others just dream of.  Others can talk about taxes, and a few other professionals can even represent you, but if you need a true professional, look with confidence to an Enrolled Agent. If the EA you find does not specialize in your specific need, they can always find one who does.

To find a