Q: What is an Enrolled Agent?
A: Enrolled Agents (EA’s) are America’s tax experts. An 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.
Q: What does the term “Enrolled Agent” mean?
A: “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.
Q: How can an Enrolled Agent help me?
A: 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.
Q: What are the differences between EAs and other tax professionals?
A: 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.)
Q: How does one become an Enrolled Agent?
A: 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.
Q: Are EAs required to take continuing professional education?
A: 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.
Q: Are Enrolled Agents bound by any ethical standards?
A: 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.
Q: Why should I choose an EA who is a member of the National Association of Enrolled Agents (NAEA)?
A: 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.
Q: How can I find an EA?
A: 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.
Q: Privilege and the Enrolled Agent
A: 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.
Tax laws are subject to change at any time. Consult your local Enrolled Agent for the latest information.
Please Note: This information is provided to you by NAEA for use as general guidance. The association is not engaged in rendering specific legal, tax or accounting advice. Only a qualified professional with all the facts at his or her disposal can determine the appropriateness of the application of any law to a given fact situation. If assistance is required, an EA should be consulted. NAEA’s State Societies of Enrolled Agents.