Professionals who help clients with taxes may benefit from becoming enrolled agents (EAs). The IRS empowers EAs with tools unavailable to most other tax preparers. These professionals can speak on clients’ behalf, argue disputes, and make cases to the federal taxation authorities. EAs can handle virtually any situation that may arise in the case of a taxpayer.

• CPAs and attorneys are licensed by the states, but enrolled agents are federally licensed.
• Her expertise is in personal finance and investing, and real estate.
• The above article is intended to provide generalized financial information designed to educate a broad segment of the public; it does not give personalized tax, investment, legal, or other business and professional advice.
• All enrolled agents have also successfully passed a background check.
• Each year, a minimum of 16 hours must be obtained, of which two must be on ethics.
• However, your tax return may be fairly straightforward and you might just want some reassurance that you’re calculating everything correctly.

Enrolled Agents’ expertise in the continually changing field of taxation enables them to effectively represent taxpayers audited by the IRS. Enrolled agents advise, represent, and prepare tax returns for individuals, partnerships, corporations, https://simple-accounting.org/smart-accounting-practices-for-independent/ 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 at all administrative levels within the IRS.

Exam Outline and Associated Cost

Taxpayers who are represented have a guide who can lead them through the process, someone authorized to speak on their behalf (and in their place) and right for the best possible outcome. Enrolled agents are authorized by the IRS to represent taxpayers before the IRS; every enrolled agent has passed testing on representation. In the 1880s, there were inadequate attorney standards, and Ccertified public accountants (CPAs) were not in existence.

• They are the only federally-licensed tax practitioners who both specialize in taxation and have unlimited rights to represent taxpayers before the Internal Revenue Service.
• Once you’ve found an agent or agents of interest, a consultation with to discuss your tax needs and wants before you decide to move forward.
• Ask a question about your financial situation providing as much detail as possible.
• In 1913, when the 16th Amendment was passed, EA duties expanded to include tax preparation and resolving taxpayer disputes with the IRS.
• In the 1880s, there were inadequate attorney standards, and Ccertified public accountants (CPAs) were not in existence.
• Explore why tax preparers and accountants might consider pursuing the EA credential in this guide.
• Enrolled Agents are specifically trained in the field of taxation.

Because of the expertise necessary to become an enrolled agent and the requirements to maintain the license, there are only about 53,700 practicing enrolled agents. The right to practice before the Internal Revenue Service is regulated by Federal statute,[8] and persons authorized to practice are known as “Federally Authorized Tax Practitioners”,[9] or “FATPs”. The FATP status is granted to attorneys, certified public accountants, and Enrolled Agents, each having unlimited Small Business Guide to Retail Accounting representation rights before the Internal Revenue Service. 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. An enrolled agent is a tax professional that has been approved to represent taxpayers in matters that involve the IRS.

Benefits of Using an Enrolled Agent

If you want to become an enrolled agent you’ll have to pass an exam or pass the experience rule. An enrolled agent doesn’t just provide services related to dealing with IRS issues but also typically works with clients on tax planning and preparation. Some former IRS employees with five years of taxation experience may apply to become an enrolled agent without taking the exam. Non-exempt persons must take and pass the Special Enrollment Examination (SEE).

The IRS suitability check involves a review of tax compliance to confirm that applicants have filed all required tax returns. EAs are not required to have a college degree or pass a comprehensive exam. A candidate can pass the Special Enrollment Examination (SEE) or work for the IRS.

Would you prefer to work with a financial professional remotely or in-person?

They are the only federally-licensed tax practitioners who both specialize in taxation and have unlimited rights to represent taxpayers before the Internal Revenue Service. All candidates are subjected to a rigorous background check conducted by the IRS. They are the only federally-licensed tax practitioners who both specialize in taxation and have unlimited rights to represent taxpayers before the Internal Revenue Service.

So, if you think your taxes are too complicated to file yourself using online software and are looking for help from a professional, consider hiring an enrolled agent. Yarilet Perez is an experienced multimedia journalist and fact-checker with a Master of Science in Journalism. She has worked in multiple cities covering breaking news, politics, education, and more.