What are Enrolled Agents? National Association of Enrolled Agents

Complete these requirements every three years to renew your application. Enrolled Agents must complete 72 hours of continued education every three years. Each year, a minimum of 16 hours must be obtained, of which two must be on ethics. In fact, the IRS says they are uncontested experts on such topics.

That is one of the reasons people have a hard time comparing the enrolled agent vs CPA. It is a marketable skill since they can negotiate with the IRS on behalf of the clients. There is no limitation on their roles; primarily, it is what taxpayers enrolled agents can represent and tax issues they can handle. An enrolled agent is commonly known as “EA”; they possess unlimited rights to practice and have the highest IRS awards. That should be the simplest enrolled agent definition since they are also personal and business tax experts.

Benefits of Becoming an Enrolled Agent

An enrolled agent must additionally pass a “tax compliance check.” Their own personal tax records must be in order. They can’t owe the IRS and must have filed all their tax returns due to date. An enrolled agent must take and pass the IRS Special Enrollment Examination (SEE), although a college degree isn’t necessary. The exam is eight hours over two days, and it covers all aspects of federal tax law, including taxation of individuals, corporations, and partnerships. It includes various regulations governing IRS collections and audit procedures.

But it’s important to remember that many of the tax preparation shops you see springing up around tax time are also completely unregulated by the IRS. Government Accountability Office went undercover and hired 19 of them during a 2014 study, only two of them ended up filing their taxes correctly. Not filing your taxes properly can get you audited, fined, or worse. To earn the “EA” designation, a tax professional must pass an IRS test and background check. Enrolled agents focus exclusively on tax issues, including audits, appeals, and collections.

Exam Outline and Associated Cost

It is not a complicated process; you can start by visiting the NAEA website. It is a great platform to get a comprehensive list of enrolled agents within your area. You have a guarantee of competent EA since NAEA work under ethical rules and regulations.

But a solid understanding of certain accreditations is key if you’re looking for a licensed tax professional to guide you through your tax needs. When making your decision about whom to work with, you may wonder about the differences between an enrolled agent (EA) and a certified public accountant (CPA). While professionals with both certifications have significant expertise, the choice between them will come down to your personal needs. 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.

Do I Need an Enrolled Agent?

They are authorized to counsel and prepare tax returns for individuals, estates, and corporations and represent them in front of the Internal Revenue Service. They can help with information on inheritance tax, income tax, tax returns, tax planning, IRS or state representation, and others. The demand for enrolled agents remains steady as entities file taxes yearly. Tax laws and regulations change regularly, thus creating a high demand for experienced professionals in this area.

Second, there are programs and laws that can work to help resolve your problem, provided you start working with your Enrolled Agent to get started as soon as possible. If your preparer asks you for one, that’s one of the surest signs that you might be dealing with a tax prep scam. The test can be taken from June 1 through the end of February of the subsequent year.

They could be specifically licensed as auditors, financial planners, corporate and executive accountants and tax consultants. So CPAs could assist in all accounting, tax and financial services for the businesses, individuals and other organizations they may represent. Enrolled Agents provides the level of representation you need to resolve problems ranging from paperwork disputes through to negotiating resolutions to large tax liabilities. As Enrolled Agents, we are licensed to work in any state and at the federal level. Plus, our experience with business accounting and tax preparation allows us to analyze and present all aspects of your financial situation.

The Act provides for confidentiality between the agent and their client under some circumstances involving audits and collections. A CPA candidate must fulfill all of their state’s education requirements, satisfy practical experience prerequisites, and pass a four-part CPA examination. EAs, unlike CPAs, cannot provide compiled, reviewed, or audited financial statements; nevertheless, they can often undertake bookkeeping work for tax return preparation. Former employees of the IRS with five years of experience can become enrolled agents without completing the Special Enrollment Examination. With the introduction of income tax, EA’s responsibilities extended to include tax preparation and addressing taxpayer problems with the IRS.

Reviewed by Subject Matter Experts

However, they have a federal license and can represent a taxpayer in any state. They must abide by the specifications of the Treasury Department’s Circular 230, which provides the guidelines governing enrolled agents. Enrolled agents that have an NAEA membership are also subject to a code of ethics and rules of professional conduct. An enrolled agent (EA) is a tax professional authorized by the United States government to represent taxpayers in matters regarding the Internal Revenue Service (IRS).

• 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.
• Looking to have a remote tax expert check the return you prepared online?
• All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly.
• NAEA members are held to a higher standard than the IRS’ minimum 72 hour continuing education requirement.
• Generally, an agent can “save” their passing scores for up to two years and only retake the portion they didn’t achieve a passing score on if they pass one or two sections on the first try.

To become an Enrolled agent, a person must obtain a preparer tax identification number, pass the Special Enrollment Exam, enroll as an agent, and be deemed suitable (e.g., background check) to perform as an Enrolled Agent. Former IRS employees with at least 5 years of experience as field tax professionals. If you’re self-employed, there are unique rules that guide your tax filing-as unique as the service you provide. Your home office and child care expenses, your retirement plan, even FICA taxes take on whole new meaning when you’re working for yourself. Your tax preparer should know, and an enrolled agent who specializes in preparing taxes for the self-employed will know for sure.

Is a Maryland State Registered Tax Preparer, State Certified Notary Public, Certified https://personal-accounting.org/your-pathway-to-becoming-an-enrolled-agent/ VITA Tax Preparer, IRS Annual Filing Season Program Participant, and Tax Writer.

• We’ve all heard the phrase about a sucker being born every minute.
• They must file accurate returns, make tax payments on time, and respond promptly to the IRS when assessed.
• If you’re looking for an expert to prepare your taxes, an enrolled agent (EA) may be one type of tax specialist you consider.
• Apply for the Special Enrollment Examination (SEE), administered by a third-party contractor.