What does the term enrolled agent mean?
Enrolled Agents, EA(s) are America’s Tax Experts. EA(s) are the only federally licensed tax practitioners who specialize in taxation and also have unlimited rights to represent taxpayers before the IRS. “Enrolled” means to be licensed to practice by the federal government, and “Agent” means authorized to appear in the place of the taxpayer at the IRS. Only enrolled agents, CPA(s) and attorneys have unlimited rights to represent taxpayers before the IRS.
How can an enrolled agent help me?
Enrolled Agents to maintain their license are required to earn 72 continuing education (CE) credit hours in a three year cycle, with a minimum of 16 (CE) credit hours per year. Which include two (CE) credit hours per year in Ethics with the balance in professional proficiency and compliance in Federal taxation or Federal tax related matters. All EA(s) are subjected to a rigorous background check conducted by the IRS prior to acceptance as an (EA) enrolled agent. As a member of NAEA you are required to complete 30 (CE) hours per year and submit the transcript prior to membership renewable.
Enrolled agents advise, represent, and prepare tax returns for individuals, partnerships, corporations, 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.
Privilege and the enrolled agent
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. The privilege applies to situations in which 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. This privilege does not apply to state tax matters, although a number of states have an accountant-client privilege.
The differences between enrolled agents vs. other tax professionals
Only enrolled agents are required to demonstrate to the IRS their competence in all areas of taxation, representation and ethics before they are given unlimited representation rights before IRS. Unlike attorneys and CPA(s), who are state licensed and who may or may not choose to specialize in taxes, all enrolled agents specialize in taxation.