An Enrolled Agent (EA) is a tax professional authorized by the U.S. government to represent taxpayers in matters concerning the Internal Revenue Service (IRS). Enrolled Agents are unique in that they are federally licensed and have unlimited rights to represent taxpayers before the IRS for audits, collections, and appeals. The authority of EAs is derived from the U.S. Department of the Treasury, which oversees their qualification through a rigorous examination process or through experience as a former IRS employee.
History of Enrolled Agents
The role of Enrolled Agents dates back to 1884 with the passage of the Horse Act. This act was created in response to fraudulent claims for Civil War losses, and it authorized certain professionals to act as intermediaries between the government and individuals. Over time, the scope of their representation evolved, particularly with the establishment of the IRS in 1913.
Qualifications and Licensure
Enrolled Agent Examination
Prospective Enrolled Agents must pass a three-part examination known as the Special Enrollment Examination (SEE), which covers:
- Individual Tax Returns
- Business Tax Returns
- Representation, Practices, and Procedures
IRS Experience
Alternatively, former IRS employees meeting specific criteria based on their previous positions and responsibilities can become Enrolled Agents without taking the SEE. This is known as the IRS “experience pathway.”
Continuing Education and Ethical Standards
Enrolled Agents are required to complete 72 hours of continuing education (CE) every three years to maintain their licensure. Additionally, they must adhere to a strict code of ethics and professional conduct stipulated in Treasury Department Circular 230, which governs the practice of all tax professionals.
Applicability and Comparison
Applicability
Enrolled Agents are equipped to handle a wide range of tax-related matters including but not limited to:
- Preparing individual, business, and estate tax returns
- Representing taxpayers in audits, collections, and appeals
- Advising clients on tax matters and compliance
Comparison to Other Tax Professionals
While both Enrolled Agents and Certified Public Accountants (CPAs) can represent taxpayers before the IRS, EAs specialize exclusively in taxation. CPAs, meanwhile, have a broader scope that includes accounting and auditing services. Tax Attorneys also provide representation but are primarily focused on legal aspects of tax disputes.
FAQs
What is an Enrolled Agent’s scope of representation?
How does one become an Enrolled Agent?
What is the difference between an Enrolled Agent and a CPA or Tax Attorney?
References
- Internal Revenue Service
- National Association of Enrolled Agents (NAEA)
- Treasury Department Circular 230
Summary
Enrolled Agents are federally authorized tax professionals with comprehensive representation rights before the IRS. They are recognized for their expertise in taxation and are bound by stringent ethical standards and continuing education requirements. Whether through examination or experience, becoming an EA signifies a high level of competence and dedication in the field of taxation.
