What is an Enrolled Agent?
Tax season is approaching. Each year taxpayers have multiple options when it comes to tax preparation. While some elect to do their taxes independently through tax software, others rely on the support of a tax professional.
If you opt for the latter, know that not all tax preparers are created equal. It is recommended you find a preparer who can meet the demands of your evolving life, and beyond that has the appropriate credentials to prepare your taxes, optimize tax credits and deductions taken, and support you if you get an IRS audit or notice.
Get the definitive definition of “What is an Enrolled Agent?” and find out how selecting a tax preparer with this designation can benefit you.
What is an Enrolled Agent?
An Enrolled Agent (EA) is a tax practitioner who can represent taxpayers before the IRS with matters of collections, audits, and appeals. In fact, EA is a federal designation of those who specialize in taxation and have unlimited rights to represent taxpayers before the IRS. Unlike attorneys and CPAs who are state-licensed and may not choose to specialize in taxes, all Enrolled Agents specialize in taxes.
EAs are experienced, well-trained tax professionals. They advise, represent, and prepare tax returns for individuals and businesses. EAs must adhere to the provisions of the Treasury Department’s standards of ethics for credentialed tax return preparers.
An EA must pass a series of tests and complete a stringent application process. In fact, the EA exam, also known as the Special Enrollment Examination (SEE), is a three-part exam that tests one’s knowledge on all tax-related matters. Once a tax return preparer becomes an EA, the IRS requires the preparer to complete 72 hours of continuing education every three years to maintain the EA credential.
When Should You Look for an Enrolled Agent?
While not all taxpayers need to seek out an EA, there are specific instances where you may benefit from using one.
1 – When you have complicated taxes. EAs are experts in tax and have the only IRS-approved designation. If in the last year you experienced the following life change consider having your return prepared by an EA:
- Relationship status changes
- Start of a business or enterprise
- Substantial monetary gift or real estate transaction
- Itemized deductions
- You change jobs or have multiple jobs
2 – When you have out-of-state returns. Enrolled agents are the only taxpayer representatives who receive their unlimited right to practice from the federal government. If you need to file in more than one state and eventually need representation before that state in an audit or resolution case, it’s more likely the same EA can help you with both federal issues.
3 – During an IRS dispute. If you’ve recently received an IRS tax notice or audit, using an EA can help. EA can use their tax expertise to represent clients in tax proceedings, audit hearings, and appeals – often at a lower cost than a traditional tax attorney.
EAs help ensure clients are treated fairly by IRS representatives, help set up payment plans with the best possible terms and make sure that the IRS follows the Taxpayer Bill of Rights.
Where Block Advisors Comes Into Play
No matter the initials after their name, the first step in your decision-making process is to make sure the tax preparer is qualified. Due to the expertise and rigorous path required to become and maintain the EA designation, there are only about 53,700 practicing EAs in America. And at Block Advisors, many of our tax advisors are EAs.
So, how do you know what’s right for you? Consider your situation and let Block Advisors match you with an experienced and credentialed tax advisor who best fits your needs.
How Can I Find a Qualified Tax Preparer?
With an average of 15 years’ experience in tax preparation, our tax advisors offer the expertise and insight you need to help guide you this tax season and beyond. To easily find an advisor that meets your needs, get matched with an advisor today!