What is an Enrolled Agent?
An Enrolled Agent (EA) is an individual who has demonstrated technical
competence in the field of taxation. Enrolled Agents are licensed by the
federal government and 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.
How can an Enrolled Agent help me?
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.
What are the differences between EAs and
other tax professionals?
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 individual
states.
Enrolled Agent Certification
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.
Continuing professional education
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.
Ethical standards
EAs are required to abide by the provisions of U.S. Treasury Department
Circular 230. EAs found to be in violation of these provisions may be
suspended or disbarred.
Privilege and the Enrolled Agent
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.
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