What is an EA?

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Enrolled Agents: The Tax Professionals

 

An Enrolled Agent (EA) is an individual who has demonstrated technical competence in the field of taxation.  Enrolled Agents, (EA's) can represent taxpayers before all administrative levels of the Internal Revenue Service. The Enrolled Agent profession has been around since 1884.

What does the term "Enrolled Agent" mean?
"Enrolled" means EA's are licensed by the Federal Government. "Agent" means EA's are authorized to appear in place of the taxpayer at the Internal Revenue Service, as the taxpayer's Agent.  Only EA's, attorneys and CPAs may represent taxpayers before the Internal Revenue Service.  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?
EA's advise, represent and prepare tax returns for individuals, partnerships, corporations, estates, trusts and any entities with tax-reporting requirements.  EA's prepare millions of tax returns each year.  Enrolled Agentsí expertise in the continually changing field of tax law enables them to effectively represent taxpayers with tax debt or being audited by the Internal Revenue Service.  Enrolled Agents can intervene when the system has gone awry for the taxpayer.

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 Internal Revenue Service.  Unlike attorneys and CPAs, who may or may not choose to specialize in taxes, all EA's specialize in taxation. EA's are the only taxpayer representatives who receive their right to practice from the United States government and can practice nation wide.  (CPAs and attorneys are only licensed by the States.)

How does one become an Enrolled Agent?
The EA designation is earned in one of two ways: (1) an individual must pass a difficult three part examination administered by the Internal Revenue Service which covers taxation of individuals, corporations, partnerships, estates and trusts, procedures, and ethics.  Next, successful candidates are subjected to a rigorous background check conducted by the Federal Government; 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.

Are EA's required to take continuing professional education?
Yes.  In addition to the stringent testing and application process, EA's are required to complete 72 hours of continuing professional education, 2 hours of ethics each year, 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 60,000 active EA's in the United States.

Are Enrolled Agents bound by any ethical standards?
EA's are required to abide by the provisions of U.S. Treasury Department Circular 230.  EA's found to be in violation of the provisions contained in Circular 230 may be suspended or disbarred.

Privilege and the Enrolled Agent
The Internal Revenue Service 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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