What
does the term “Enrolled Agent” mean?
“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, attorneys, and
CPAs may 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 dealings with
the U.S. Treasury Department.
How
does one become an Enrolled Agent?
The
license is earned in
one of two ways, by passing
a comprehensive 2-day
examination which covers
all aspects of the tax
code, or having worked
at the IRS for five years
in a position which regularly
interpreted and applied
the tax code and its
regulations. All candidates
are subjected to a rigorous
background check conducted
by the IRS.
How
can Enrolled Agent help me?
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 audited by
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.
Are
Enrolled Agents required to take continuing professional
education?
In
addition to the stringent
testing and application
process, the IRS requires
Enrolled Agents to complete
72 hours of continuing
professional education,
reported every three
years, to maintain their
Enrolled Agent status.
NAEA members are obligated
to complete 90 hours
per three year reporting
period. Because of the
knowledge necessary to
become an Enrolled Agent
and the requirements
to maintain the license,
there are only about
40,000 practicing Enrolled
Agents.
What
are the differences between Enrolled Agents and other
tax professionals?
Only
Enrolled Agents are required
to demonstrate to the
IRS 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 Enrolled
Agents specialize in
taxation. Enrolled Agents
are the only taxpayer
representatives who receive
their right to practice
from the U.S. government
(CPAs and attorneys are
licensed by the states).
Are
Enrolled Agents bound by any ethical standards?
Enrolled
Agents are required to
abide by the provisions
of the Department of
Treasury’s Circular
230, which provides the
regulations governing
the practice of Enrolled
Agents before the IRS.
NAEA members are also
bound by a Code of Ethics
and Rules of Professional
Conduct of the Association.
Why
should I choose an Enrolled Agent who is a member of
the National Association of Enrolled Agents (NAEA)?
The
principal concern of
the National Association
of Enrolled Agents and
its members is honest,
intelligent and ethical
representation of the
financial position of
taxpayers before the
governmental agencies.
Members of NAEA must
fulfill continuing professional
education requirements
that exceed the IRS’ required
minimum. In addition,
NAEA members adhere to
a stringent Code of Ethics
and Rules of Professional
Conduct of the Association,
as well as the Treasury
Department’s Circular
230 regulations. NAEA
members belong to a strong
network of experienced,
well-trained tax professionals
who effectively represent
their clients and work
to make the tax code
fair and reasonably enforced.
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