What is an Enrolled Agent? Why Should I Hire One?Pat Fontana
Tax season can be complicated and confusing. You may wonder whether you should attempt to prepare your tax returns yourself or hire a professional to do them for you. Once you decide to hire someone, you may be concerned about finding someone who is best qualified to handle your particular situation. There are different categories of tax preparers, including accountants and enrolled agents. What is an enrolled agent? Should you hire one for your specific tax situation?
The Privilege of Representing You
Enrolled agent status is the highest credential awarded by the Internal Revenue Service (IRS). Being an enrolled agent is an elite status that means the individual has been granted the privilege of representing taxpayers before the IRS. An individual becomes an enrolled agent only after passing a comprehensive examination covering individual and business tax returns or by having significant experience as a former IRS employee.
An enrolled agent must adhere to ethical standards to maintain this elite and privileged status. Beyond passing the examination, a candidate must also pass a rigorous background check. In addition, an enrolled agent must complete continuing education that includes a minimum amount of training on ethics or professional conduct topics.
Continuing Education Requirements
To ensure enrolled agents keep current on tax regulations and codes, they must participate in certified continuing education courses for a minimum of 72 hours every three years. They must also obtain at least 16 hours of continuing education, including two hours of ethics or professional conduct, each enrollment year.
Steeped in History
The history of enrolled agents dates back to the 1880s. Certified public accountants (CPAs) didn’t exist yet and there were inadequate attorney standards at the time. After questionable, possibly fraudulent, claims were submitted for Civil War losses, Congress acted to regulate individuals who would represent citizens in their interactions with the US Treasury Department.
The Horse Act was signed into law in 1884 by President Chester Arthur, establishing and standardizing enrolled agents. The 16th Amendment was passed in 1913, allowing Congress to levy a federal income tax, and enroll agent duties were then expanded to include tax preparation and resolving taxpayer disputes with the IRS.
Is an Enrolled Agent Right for You?
There are only about 46,000 practicing enrolled agents in the US, due to the extensive expertise necessary and the stringent requirements in place to maintain the license. The enrolled agent license is issued on a federal level so agents can represent taxpayers in any state. They are unrestricted as to which taxpayers they can represent, what types of tax matters they can handle, and which IRS offices they can represent clients before.
Whether you need to prepare a tax return as an individual, a partnership, corporation, estate, trust, or any other entity with tax-reporting requirement, an enrolled agent’s expertise and experience can help. Particularly given the changing tax codes and regulations, you need that extensive, current knowledge that comes with continuing education as well as the ability to effectively represent you at all administrative levels within the IRS.
CPAs and EAs
CPAs also have to pass an exam and participate in continuing education to maintain their certification. A CPA is more than qualified to help you with your cash flow analysis, budget planning, asset and depreciation allocation, and financial records and planning for your business, but they don’t necessarily all specialize in tax preparation. On the other hand, all enrolled agents specialize in taxation.
Extensive Knowledge of Emerging Tax Laws
When it’s time to prepare your tax return, whether as an individual or as a business concern, you need the expertise that will ensure you are in line with all the emerging tax laws. At Clear View, our tax staff includes Certified Public Accountants, Enrolled Agents, and Registered Tax Return Professionals. We attend over 80 hours of tax training every year so we can stay current on all tax law changes, on the Arizona state level as well as on the federal level.
The Clear View professional team can help ensure you maximum your tax benefits, plan for tax liabilities, and stay in compliance while taking advantage of all legal tax deductions to save money. As enrolled agents, we are authorized to represent you before the IRS on all matters related to audits, collections, and appeals.
Contact us today to learn more about how our team can help you at tax time and throughout the year.