What is an Enrolled Agent?

tax representationEnrolled Agent (EA) status is a federally-authorized designation. It is earned by an elite group of tax representation professionals who have completed extensive training and education, demonstrating specialized expertise in all areas of the IRS tax code well beyond those of typical tax practitioners. Upon completing all requirements, the Enrolled Agent is recognized by the U.S. Department of the Treasury as an authority to represent taxpayers in their dealings with the IRA. Enrolled Agent status is the highest credential that the IRS awards.

How does a tax practitioner become an Enrolled Agent?

A candidate can earn Enrolled Agent status in two ways. He or she must pass a three-part test, covering individual and business tax codes, and all aspects of representation, practice and procedures. The entire exam can take ten and half hours, although it is not necessary to take all three sections at once. If the candidate has worked at the IRS for five consecutive years in a relevant position, applying and interpreting codes and regulations regarding income, estate, gift, employment or excise taxes, than the practical experience is accepted, and the exam is waived. The applicant must also pass a background check, and adhere to stringent ethical standards.

Is Enrolled Agent status permanent?

No. In order to maintain their designation, Enrolled Agents must complete at least 72 hours of continuing professional education (CPE) every three years, with a minimum of 16 hours each year. This is to ensure that Enrolled Agents are always up-to-date on the latest changes to the tax codes. The National Association of Enrolled Agents (NAEA) goes even further, requiring their members to complete 90 hours of training every three years.

How do I know I can trust my tax representation professional?

When you work with an Enrolled Agent, you can have peace of mind. Enrolled Agents don’t only keep up with tax codes. At least two of the CPE hours of training must be in either ethics or professional conduct. And of course, Enrolled Agents are bound by the Department of the Treasury’s regulations (Circular 230). NAEA members adhere to their own Code of Ethics and Rules, in addition.

Why should I use an Enrolled Agent specifically, instead of an attorney or CPA?

Almost any attorney or CPA would be happy to do your taxes, even if that’s not their specialty. Maybe preparing taxes represents only a third of their business. However, all Enrolled Agents, by definition, specialize in taxes and tax representation. That means that an Enrolled Agent knows the latest changes to the tax codes, and understands thoroughly how to be strategic and best preserve your money. Only Enrolled Agents must demonstrate their expertise to the IRS. Only Enrolled Agents receive their authorization directly from the federal level. CPAs and attorneys are only licensed by the state.

Only Enrolled Agents are required to keep up with the constantly-changing tax environment. And they are sworn to a higher level of ethics and professional behavior. The IRS awards no higher credential than that of Enrolled Agent.

What is the National Association of Enrolled Agents?

The National Association of Enrolled Agents (NAEA) goes even beyond the IRS’ requirements. Their members must complete even more training (90 hours instead of 72), and commit to an additional Code of Ethic and Rules of Professional Conduct. The NAEA exists to ensure that its members serve taxpayers honestly, ethically and at the highest level of expertise.

Is Enrolled Agent status a new designation?

No. Enrolled Agent status traces its roots all the way back to the Enabling Act of 1884. It was created in reaction to the flood of fraudulent war loss claims after the Civil War. Many citizens whose property had been seized by the government for use in the war effort had tremendous problems settling their claims. At that time, Congress created the Enrolled Agents designation, with the power of advocacy to represent clients against the government.

In the 1900s, the professional territory of Enrolled Agents was expanded. As tax codes became more complex, more credentials were required to ensure that tax representation professionals were fully prepared.

The requirements for achieving Enrolled Agent status has grown since its inception. Today’s EAs represent the highest level of tax professional training, specialization and ethical requirements.

Learn more about Enrolled Agents at IRS.gov

Courtesy of NAEA

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Alexis E. Gallati, EA, MBA, MST

Alexis E. Gallati, EA, MBA, MST

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