What is an Enrolled Agent (EA)?
An Enrolled Agent is a person who has earned the privilege of representing taxpayers before the Internal Revenue Service. Enrolled Agents, like attorneys and certified public accountants (CPAs), are generally unrestricted as to which taxpayers they can represent, what types of tax matters they can handle, and which IRS offices they can represent clients before.
You must demonstrate technical competence, pass a federal background check and agree to be subject to federal regulations regarding your practice behavior.
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 may represent taxpayers before the IRS.
The Enrolled Agent profession has its beginning in 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. They created the Enrolled Agent license to help people navigate the claims ethically!
How can an EA 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 in a typical year. EAs’ 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 EAs are required to demonstrate to the Internal Revenue Service their
competence in matters of taxation before they may represent a taxpayer before the IRS. Unlike attorneys and CPAs, who may or may not choose to specialize in taxes, all EAs specialize in matters of taxation. EAs are also 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 someone become an EA?
The EA designation is earned in one of two ways:
- 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, the successful candidates are subjected to a rigorous background check conducted by the Internal Revenue Service; or
- 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 (CPE)?
In addition to the stringent testing and application process, EAs are required to complete 72 hours of CPE, reported every three years and six of these must be devoted to ethics. Because of the difficulty in becoming an EA and keeping up the required credentials, there are fewer than 55,000 EAs in the world.
Are EAs bound by any ethical standards?
EAs are required to abide by the Standards of Ethical Conduct as published in 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 EAs. 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.