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What is An Enrolled Agent

An Enrolled Agent (EA) is a federally authorized tax preparer who has technical taxation expertise and who is empowered by the U.S. Department of the Treasury to represent taxpayers before all administrative levels of the Internal Revenue Service for IRS audit help, collections, and appeals.

What does the term "Enrolled Agent" mean?

"Enrolled" means to be licensed to practice by the federal government, and "Agent" means authorized to appear in the taxpayer's place at the IRS. Only enrolled agents, attorneys, and CPAs may represent taxpayers before the IRS but Alliance Financial & Income Tax represents taxpayers with enrolled agent certification. The profession of an enrolled agent began around 1884 after questionable claims had been presented for Civil War losses. Back then, Congress regulated the profession that represented citizens in their dealings with the U.S. Treasury Department.

How do you become an enrolled agent?

The enrolled agent license is earned in one of two ways: by passing a comprehensive examination that covers all aspects of the tax code to receive an enrolled agent certificate, or by having worked at the IRS for five years in a position that regularly interpreted and applied the tax code and its regulations. All candidates must pass a rigorous background check conducted by the IRS.

How can an Enrolled Agent help me?

Enrolled agents advise, represent, and prepare tax returns for individuals, partnerships, corporations, estates, trusts, and entities with tax-reporting requirements. An enrolled tax agent maintains expertise in the continually changing field of taxation, enabling them to represent taxpayers audited by the IRS effectively.

Privilege and the Enrolled Agent

The IRS Restructuring and Reform Act of 1998 allows federally authorized tax preparers, defined as those bound by the Department of Treasury’s Circular 230 regulations, a limited client privilege. Confidentiality is required between the taxpayer and the enrolled agent under certain conditions. The privilege applies to situations where the taxpayer is represented in cases involving audits and collection matters. It does not apply to the preparation and filing of a tax return. Although several states have an accountant-client privilege, this privilege does not apply to state taxes.

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 designation. NAEA members are obligated to complete 90 hours per three-year reporting period. Because of the knowledge necessary to become a tax enrolled agent and the requirements to maintain the license, there are only about 46,000 practicing enrolled agents.

What are the differences between Enrolled Agents and other tax professionals?

Only enrolled agents are required to demonstrate competence in matters of taxation to the IRS before they may represent a taxpayer before the IRS. Unlike attorneys and CPAs, who may or may not choose to specialize in taxes, all enrolled agents specialize in taxation. Enrolled agents are the only taxpayer representatives who receive their right to practice from the U.S. government (the states license CPAs and attorneys).

Do Any Ethical Standards bind enrolled Agents?

Enrolled agents must abide by the Department of Treasury’s Circular 230 provisions, which provide the regulations governing the practice of enrolled agents before the IRS. NAEA members are also bound by the Association's Code of Ethics and Rules of Professional Conduct.

Why should I choose an Enrolled Agent who is a member of the National Association of Enrolled Agents (NAEA)?

The principal concern of the National Association of Enrolled Agents and its members is honest, intelligent, and ethical representation of the financial position of taxpayers before governmental agencies. Members of the enrolled agent association must fulfill continuing professional education requirements for tax planning that exceed the IRS’ required minimum. In addition, NAEA members adhere to a stringent Code of Ethics and Rules of Professional Conduct of the Association and the Treasury Department’s Circular 230 regulations. NAEA members belong to a strong network of experienced, well-trained tax professionals who effectively represent their clients and work to make the tax code fair and reasonably enforced.

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