What is an enrolled agent?
Enrolled agents (EAs) are America’s tax experts. They are the only federally-licensed tax practitioners who both specialize in taxation and have unlimited rights to represent taxpayers before the internal Revenues service. These tax specialists have earned the privilege of representing taxpayers before the IRS by either passing a stringent and comprehensive three-part examination covering individual tax returns; and, representation, practice, and procedure-or through relevant experience as a former IRS employee. All candidates are subjected to a rigorous background check conducted by the IRS.
What are the difference between enrolled agents and other tax professionals?
The enroller licences are the most expensive licence the IRS grants the tax professionals. Enrolled agents are generally unrestricted as to which tax payers they can represent, what type of tax matters they can handle, and the IRS offices before which they may practice.
Unlike attorneys and CPAs, who may or may not choose to specialize in taxation. CPAs and attorneys are licensed by the states, but enrolled agents are federally licensed. While the IRS requires all prepares to obtain and maintain a valid Prepare Tax Identification Number (PTIN), enrolled agent have gone beyond the basic requirement and have demonstrated their expertise through testing.
What is representation?
Taxpayers who find themselves in tax trouble are allowed to represent themselves before the various administrative levels of the IRS. However, more taxpayers facing an IRS collection action, an IRS audit any sort (whether the IRS ask for mounds of documents by mail an requests an in-person examination), or an appeal any collection or examination action would be wide to send a qualified tax expert in his or her place. Taxpayers who are represented have guide who can lead them through the process, someone authorized to speak on their behalf (and in their place) and fight for the best possible outcome. Enrolled agents are authorized by IRS to represent the taxpayers before the IRS; every enrolled agent passed testing on representation.
The enrolled agent license is the highest credential the IRS issue.
The advantage of working with enrolled agent lies not only in the depth of his or her experience and understanding of how to prepare a tax return, but in his or her knowledge of tax law that may be used to represent taxpayers before the IRS. If you get a letter from the IRS or worse, are audited or are the target of a collection action your EA can speak directly to the IRS on your behalf.
Why should I choose enrolled agent who is member of the National Association of Enrolled Agents (NAEA)?
The IRS recommends using a tax prepare that is a member of professional organization that offer continuing education and other resources, and hold members to a code of ethics. NAEA goes beyond the IRS’ recommendations by requiring member to fulfil continuing education requirements that exceed the IRS’ required minimum.
In addition NAEA member must adhere to stringent Code of Ethics and Rule of Professional Conduct. Member of NAEA belong to strong network of experienced, well-trained tax professionals who effectively represent their client and work to make the tax code fare and reasonable enforced.
How can an enrolled agent help me?
Enrolled agents advise, represent and prepare the tax return of individuals, partnership, corporation, estates, trusts and any other entity with tax reporting requirements. EAs prepare millions of tax returns each year and their expertise in continuously changing field of taxation enables them to effectively represent taxpayers audited by the IRS. In addition to a tax preparation and tax representation, may enrolled agents offer other business related service which may include:
Financial planning or budgeting
Financial statement preparation
Because enrolled agents have such diverse backgrounds and may offer a variety of services, it is important to talk with your enrolled agent about how best to put his or her expertise to work for you.
Are enrolled agents required to take continuing professional education?
In addition to stringent testing and application process, the IRS requires enrolled agents to complete 72 hours of continuing education every three year to maintain their licences. NAEA raises the bar even further-its member is required to complete at least 90 hours in a three year period.
How can I find an EA?
The easiest and fastest way to locate an enrolled agent in your area is to visit www.naea.org. The “Find an EA” link located in the home page will allow you to search instantly by location or specialty. You can also all the EA referral service at 800.424.4339.this is an unattended service, but you can indicate a preference to receive your response by email, fax or mail, and all calls are answered within three business days.
You might also want to check your local Yellow Pages® under “Tax Preparation”. Look for the “EA” abbreviation following the professional’s name.
Are there really that many tax changes each year that might affect me?
Yes. Every year there are numerous changes to the tax laws and tax code. The National Taxpayer advocate has identified the complexity of the tax code as most serious problem facing taxpayer and the IRS alike. A recent review of the tax code revealed that it includes 3.8 million words and that there have been approximately 4,428 changes to the code over the preceding ten years, an average age of more than one a day. Frequently, provisions are added and others expire. Some provisions are indexed for inflation, so they change as well. Some are affecting at the beginning of the year, while others become effective on the date a particular bill or law is signed. Congress is constantly changing the tax laws. EAs take continuing education courses each year to keep up with the changes and have research tools at their disposal to constantly monitor updates. Most taxpayers do not have the time, desire or the research tools necessary to keep up with the tax code each year. When you an enrolled agent, you know your preparer keeps up with the rules and regulations and will use this expertise to do the best job possible for you.
What are the key points to remember when hiring a tax professional?
Your tax needs are best served by an enrolled agent. However, no matter who you hire there are certain things to keep in mind.
Always use a qualified professional to prepare your return.
Prepares should always sign the returns and include their preparer Tax Identification Numbers(PTIN).
Beware of preparers who encourage you to lie or otherwise modify your information in order to get bigger refund.
The taxpayer is responsible for what’s on a tax returns. Reputable preparers will ask to see receipts and will ask multiple questions to determine whether expenses, deductions and other items qualify. By doing so, they are trying to help their clients avoid penalties, interest or additional taxes that could return from an IRS examination.