An enrolled agent isn’t your standard tax professional. Unlike traditional accountants, enrolled agents are specialized taxation experts capable of representing tax payers during IRS audits, collections and tax audit appeals. With unique authorization by the IRS, EAs assist individuals and businesses who require advanced assistance with gathering, investigating and reporting their taxes. While nobody wants to be in the sights of an IRS audit, enrolled agents are here to ensure taxpayers are fairly treated and governed.
Empowerment and Expertise – History of EAs
This dynamic taxing profession began in 1884 as a response to dubious claims filed after the Civil War. During this time, the United States sought to repay its citizens who lost valuable assets due to this historic conflict. Unfortunately, a lack of regulation resulted in more than a few questionable reports. To prevent future complication and confusion, Congress formed what we now know as enrolled agents. Governed by the Department of Treasury’s Circular 230 regulations, enrolled agents have unlimited rights to represent, consult and operate on behalf of taxpayers.
Enrolled Agents and CPAs – The Difference
While both EAs and CPAs are trained tax professionals, the EA designation is the highest credential awarded by the IRS. Unlike CPAs, which often specialize in a type of tax law, enrolled agents have demonstrated expertise in all taxation topics. Because of their broad understanding of taxes, these elite professionals are regarded as the ultimate tax expert. In addition to standard functions, such as preparing tax returns and representing taxpayers, enrolled agents also work as consultants for private and public sector tax returns.
Components of Expertise – Becoming an EA
Dissimilar to standard tax professionals, which typically require a state license and training in one area of taxation, enrolled agents specialize in all areas of individual and business taxation. There’s two distinct pathways available to those interested in becoming an enrolled agent. The least common option requires working for the IRS as a tax code interpreter for at least five years. However, this is the exception, not the rule.
For the majority of enrolled agents, the journey to this elite credential begins by passing the Special Enrollment Examination. Also known as the SEE, this intensive exam consists of three distinct sections. Each section covers a specific realm of tax law, which include:
- Section 1 – Individuals
- Section 2 – Businesses
- Section 3 – Representation, Practices and Procedures
After passing the SEE, aspiring EAs must apply for this designation and pay the enrollment fee. Once received and approved, EAs must complete 72 hours of continuing education from an IRS-approved course. This requirement ensures EAs remain current in the constantly changing realm of taxation.
Employment and Beyond – Where EAs Work
What makes enrolled agents unique from their counterparts is the tax-centric approach used in this profession. Because they hold a federal license, EAs can work in any state, which translates to greater career opportunities than traditional tax professions. Enrolled agents can secure work in a variety of industries, such as corporate, government or individual tax services.
From assisting small businesses to managing enormous corporate accounts, an enrolled agent has the knowledge and ability to streamline the complex world of taxes. While the landscape of taxation continues to change, the importance of enrolled agents is as unwavering as the April 15 deadline.