What is an Enrolled Agent?
An Enrolled Agent (EA) is an individual
who has demonstrated technical competence in the field of taxation.
Enrolled Agents, or EAs, can represent taxpayers before all
administrative levels of the Internal Revenue Service.
What does the term "Enrolled Agent" mean?
"Enrolled" means EAs are licensed by the federal government. "Agent"
means EAs are authorized to appear in place of the taxpayer at the
Internal Revenue Service. Only EAs, attorneys, and CPAs can 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 dealing 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. Enrolled Agents' 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 their competence in
matter of taxation to the Internal Revenue Service before they
represent a taxpayer. 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
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 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 background 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.
Are EAs required to take 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.
Are Enrolled Agents bound by any ethical
standards?
EAs are required to abide by the provisions of U.S. Treasury Department
Circular 230. EAs found to be in violation of the provisions contained
in Circular 230 may be suspended or disbarred.
Why should I choose an EA who is a member of the
National Association of Enrolled Agents (NAEA)?
NAEA is the organization of and for Enrolled Agents. The principal
concern of the association and its members is honest, intelligent and
ethical representation of the financial position of taxpayers before
governmental agencies.
Members of NAEA are required to complete a minimum of 30 hours of
continuing professional education each year in the interpretation,
application and administration of federal and state tax laws in order
to maintain membership in the organization. This requirement surpasses
the IRS required minimum of 16 hours per year.
How can I find an EA?
The ability to locate an EA in your local area is as close as your
computer, your telephone or your mailbox. You can search the website at
www.naea.org. Click on "Find a Tax Advisor" and then search first by
state and then by zip code. This is an instant referral service
available at any time. You can also call the NAEA 24-hour referral
service at 800-424-4339 (7 days a week) or write the National
Association of Enrolled Agents. You will be sent a list of names and
addresses of members located in your area. Many EAs are listed in the
yellow pages under "Tax Preparation." Look for the words Enrolled
Agent, Enrolled to Represent Taxpayers Before the IRS and the EA
designation.
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.
National Association of
Enrolled Agents
www.naea.org
Internal Revenue Service
www.irs.gov
Santa Cruz Chamber of
Commerce
www.santacruzchamber.org
California Secretary of State
www.sos.ca.gov
State of California
Franchise Tax Board
www.ftb.ca.gov
Mission Society of Enrolled Agents
www.missioneas.org