Enrolled Agents: Frequently Asked Questions
An enrolled agent (EA) is a federally licensed tax practitioner who has technical expertise in the field of taxation and is empowered by the U.S. Department of the Treasury to represent taxpayers for audits, collections and appeals before all administrative levels of the Internal Revenue Service.
"Enrolled" means to be licensed to practice by the federal government and "agent" means authorized to appear in place of the taxpayer before IRS. Only enrolled agents, attorneys and certified public accountants may represent taxpayers before IRS. The enrolled agent profession dates back to 1884 when, after questionable claims were presented for Civil War losses, Congress acted to regulate persons who represented citizens in their dealings with the U.S. Department of the Treasury.
Enrolled agents advise, represent and prepare tax returns for individuals, partnerships, corporations, estates, trusts and any other entity with tax-reporting requirements. EAs prepare millions of tax returns each year. Enrolled agent expertise in the continually changing field of taxation enables them to effectively represent taxpayers audited by IRS.
Some enrolled agents work only during tax season or by appointment only, while other enrolled agents have year-round practices. In addition to tax preparation and tax representation, many enrolled agents offer other business-related services which may include:
- Accounting and bookkeeping
- Financial planning or budgeting
- Payroll services
- Financial statement preparation
- Mortgage assistance
Because enrolled agents have such diverse backgrounds and may offer a variety of services, it is important to talk with your enrolled agent about how his/her expertise may assist you.
Only enrolled agents demonstrate their competence in matters of taxation and report their hours of continuing professional education to IRS. Enrolled agents are the only taxpayer representatives who receive their right to practice directly from the U.S. government (certified public accountants and attorneys are licensed by states and their licenses are state specific). Unlike attorneys and certified public accountants, who may or may not choose to focus on taxes, all enrolled agents specialize in taxation.
The license is earned in one of two ways: either by passing a stringent and comprehensive examination that covers all aspects of the tax code or by having worked at IRS for at least five years in a position that regularly interpreted and applied the tax code and its regulations. All candidates are subjected to a rigorous background check conducted by IRS. The license is national, not state specific, allowing enrolled agents to assist taxpayers located throughout the country. Go to "How to Become an EA" for more information.
In addition to the stringent testing and application process, IRS requires enrolled agents to complete 72 hours of continuing professional education every three years to maintain their licenses. NAEA members are obligated to complete 90 hours in each three year period. Due to the expertise necessary to become an enrolled agent and the requirements to maintain the license, there are only about 40,000 practicing enrolled agents.
Yes. Enrolled agents are required to abide by the provisions of the Treasury Department's Circular 230 which provides the regulations governing the practice of enrolled agents before IRS. NAEA members are also bound by a code of ethics and rules of professional conduct.
The principal concern of NAEA and its members is honest, intelligent and ethical representation of the financial position of taxpayers before government agencies. Members of NAEA must fulfill continuing professional education requirements that exceed IRS' standards. In addition, NAEA members adhere to a stringent code of ethics and rules of professional conduct 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 on behalf of taxpayers to see that the tax code is fairly applied and reasonably enforced.
The ability to locate an EA in your local area is as close as your computer, your telephone or your mailbox. You can use the "Find an EA" selection button on this web page to find an EA in Georgia. To find an EA nationwide you can search the NAEA website at http://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.
The IRS Restructuring and Reform Act of 1998 provides a limited client privilege for federally authorized practitioners (those bound by the Treasury Department's Circular 230 regulations). This privilege allows confidentiality between the taxpayer and the enrolled agent when 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. Ask your enrolled agent how privilege may affect you.