An enrolled agent is someone who is recognized by the U.S. Department of Treasury as a tax advisor and federally-authorized tax practitioner. They typically work for accounting or tax firms, or they can be self-employed. They help individuals and businesses with their tax preparation
What Is an Enrolled Agent?
An enrolled agent (EA) is a tax professional authorized by the United States government to represent taxpayers in matters regarding the Internal Revenue Service (IRS). EAs must pass an examination or have sufficient experience as an IRS employee and pass a background check.
Internal Revenue Service. “Enrollment Agent Information.”
Enrolled agents first appeared in 1884 due to issues arising with Civil War loss claims.
Roles and responsibilities of an enrolled agent
Enrolled agents have a variety of roles and responsibilities to fulfill to meet the needs of their clients and comply with IRS rules and regulations. Some tasks they complete include:
- Represent clients (taxpayers) relating to issues with their taxes to the IRS.
- Maintain client confidentiality regarding tax information and personal documents.
- Perform audits and appeals on behalf of their clients.
- Provide tax advice to clients in adherence with IRS rules and regulations.
- Teach clients about tax laws and regulations and how they affect their business.
- Complete basic accounting tasks such as updating financial records and reviewing bank statements.
- Pursue continued education courses each year to maintain licensure.
- Check in with previous clients to provide additional services.
- Answer client calls and set up appointments to meet about their taxes.
- Help clients identify potential liabilities on their balance sheet.
- Create a tax plan for clients for future use.
- Calculate deductions and other exceptions that could contribute to a client paying less in taxes.
Benefits of hiring an enrolled agent
- Allows you to focus on other aspects of your business:By hiring an enrolled agent to help with tax preparation and other accounting needs, you can put more focus toward other areas of your business such as sales and marketing, employee onboarding or day-to-day operations.
- Provides your business with extensive tax expertise:Enrolled agents are considered to have the highest credential a tax professional can receive. This, paired with their continued education requirements, means that they have up-to-date and advanced knowledge in tax-related matters.
- Helps small businesses in lieu of accounting departments:If you operate a small business or a sole proprietorship, an enrolled agent could potentially help you perform certain duties that would normally be assigned to members of an accounting department. For example, they could help you prepare and file your taxes or your tax return.
FAQs
Who should hire an Enrolled Agent?
Individuals or businesses needing help with IRS issues
People filing complex tax returns
Anyone who gets audited
Small business owners needing tax planning
What kind of education is required to be an enrolled agent?
- Choose a track: either work for the IRS for five years or take the Special Enrollment Exam (SEE).
- If they choose the former track, then they need to pursue work at the IRS.
- If they choose the latter track, then they can move straight to step four.
- Get a Preparer Tax Identification Number (PTIN).
- Participate in an education course.
- Register and take the SEE.
- Apply for an enrolled agent license with the IRS.
- Renew their enrolled agent license every three years.
- Renew their PTIN every year.
- Complete 16 hours of continued education (with at least two ethics courses) every year.
- Complete 72 hours of continued education every three years.
