An enrolled agent (EA) is a tax professional authorized by the United States government to represent taxpayers in matters regarding the IRS.
The “EA” designation is the highest tax credential recognized by the IRS and they are federally licensed practitioners who have unlimited rights to represent taxpayers before the IRS for any issues relating to collections, audits, or tax appeals. They can advise and represent individuals, corporations, partnerships, estates, trusts, and anything else required to report to the IRS.
Enrolled agent vs CPA
Most Certified Public Accountants (CPAs) don’t specialize in taxation. They generally have a specialty in a specific area of accounting or finance. They are examined and licensed at the state level and can only practice in the state where they are licensed. Enrolled agents are always tax specialists and are federally licensed.
Enrolled agents must pass the eight-hour, two-day IRS Special Enrollment Examination covering all aspects of federal tax law, regulations, and audit procedures. A tax professional can also qualify for an EA license if they’ve worked for the IRS for at least five years in a position that requires extension knowledge of the tax code. 72 hours of continuing education is required every three years, while National Association of Enrolled Agents (NAEA) members must complete 30 hours per year of continuing education and comply with the association’s code of ethics and rules of conduct.
Do I need an enrolled agent?
If you have a very straightforward tax situation year over year, maybe not. But if you ever find yourself having to deal with the IRS, having someone who can represent you without limitation can be an invaluable asset. If you are ever audited or have a collection issue, an enrolled agent can help you navigate the process, provide support along the way, and assist you in negotiations with the IRS. Your enrolled agent can also offer sound advice for any current tax issues and tax planning solutions for the future.