Enrolled Agent (EA)

Enrolled Agents (EAs) are federally-authorized tax practitioners who have technical expertise in the field of taxation and are empowered by the U.S. Department of the Treasury to represent taxpayers before all levels of the Internal Revenue Service (IRS) for audits, collections, and appeals. The EA designation is the highest credential the IRS awards, and individuals who obtain this elite status must adhere to rigorous ethical standards and complete continuing education courses to maintain their status.

Overview

What is an Enrolled Agent?

An Enrolled Agent is a person who has earned the privilege of representing taxpayers before the Internal Revenue Service. EAs, like attorneys and certified public accountants (CPAs), have unlimited practice rights, meaning they are unrestricted with regard to which taxpayers they can represent, what types of tax matters they can handle, and which IRS offices they can practice before.

How to Become an Enrolled Agent

To become an EA, candidates must either:

1. Pass the Special Enrollment Examination (SEE): This is a three-part comprehensive IRS test that covers individual and business tax returns.
2. Have relevant work experience: Specifically, individuals who have worked at the IRS for at least five years in a position that requires the interpretation and application of the tax code are eligible for the EA credential without taking the SEE.

Once they meet one of these requirements, individuals must apply for enrollment and pass a background check. Enrolled Agents must also complete 72 hours of continuing education every three years, which includes six hours of ethics training.

Responsibilities of Enrolled Agents

EAs provide various services related to tax preparation and tax representation. Their responsibilities include:

• Tax Consultation and Preparation: EAs prepare individual, business, and other entity tax returns. They offer tax planning services to help clients minimize their tax liabilities.
• Tax Representation: EAs represent clients in audits, collections, and appeals before the IRS. They can negotiate on behalf of taxpayers and help resolve any disputes.
• Tax Advice: They give professional advice on tax matters, ensuring that clients comply with current tax laws and regulations.

History of Enrolled Agents

The EA profession dates back to 1884 when Congress enacted the Horse Act after questionable claims for losses incurred during the Civil War were rampant. The Act aimed to regulate agents who represented citizens in their claims against the government. Over the years, the role of EAs evolved and expanded considerably.

In 1959, Circular 230 was issued to regulate practice before the IRS, establishing various rules and guidelines for tax practitioners, including EAs. Further revisions to Circular 230 have been made to enhance the reliability and professionalism of practitioners and to protect taxpayers.

FAQ

Why Choose an Enrolled Agent?

Enrolled Agents are uniquely qualified to represent taxpayers before the IRS due to their expertise in tax issues. They can handle complex tax situations and offer taxpayers peace of mind, knowing they are represented by well-trained professionals.

How does an Enrolled Agent differ from CPAs and Tax Attorneys?

• EAs: Specialize solely in matters of taxation and have a direct relationship with the IRS.
• CPAs: Certified Public Accountants are licensed at the state level and can provide a wide range of accounting services in addition to tax services.
• Tax Attorneys: Specialize in tax law and can represent clients in tax court.

What is the Special Enrollment Examination (SEE)?

The SEE is a comprehensive three-part test administered by Prometric on behalf of the IRS. The exam covers all aspects of the tax code related to individual taxes, business taxes, and representation practices. It is designed to assess the knowledge and skills required for high-quality tax preparation and representation.

Continuing Education Requirements for EAs

EAs must complete a minimum of 72 hours of continuing education every three years, including a minimum of six hours focused on ethics and professional conduct. This ensures that EAs stay current with the constantly changing tax laws and IRS procedures.

How Can I Verify an EA’s Credentials?

The IRS maintains a searchable directory of tax return preparers who have valid PTINs and are recognized as CPAs, attorneys, enrolled agents, enrolled retirement plan agents, and enrolled actuaries. The directory is available here.

Where Can I Find More Information?

For more detailed information about Enrolled Agents, one can visit the National Association of Enrolled Agents (NAEA) at https://www.naea.org. This website provides resources for both prospective and current EAs, including guidance on licensing, continuing education, and professional development.

Enrolled Agents play a critical and indispensable role in the tax industry, providing expert services that help taxpayers navigate and comply with complex tax laws and regulations. Through their stringent certification and continuous education, EAs remain a trusted resource for tax preparation and representation.