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An enrolled agent is an individual licensed by the United States Treasury to represent taxpayers before all administrative levels of the IRS for audits, collections and appeals. The enrolled agent has technical expertise in the field of taxation. The enrolled agent can also represent the taxpayer in state agencies for audits, collections and appeals.
The IRS Restructuring and Reform Act of 1998 allows federally authorized practitioners (those bound by the Department of Treasury’s Circular 230 regulations) a limited client privilege. This privilege allows confidentiality between the taxpayer and the enrolled agent under certain conditions. The privilege applies to situations in which the taxpayer is being represented in tax audits and collection matters. Most states have accountant-client privileges to protect the confidentiality between client and practitioner.
What does the term “Enrolled Agent” mean?
“Enrolled” means to be licensed to practice before the federal government. “Agent” means authorized to appear in the place of the taxpayer before the United States Treasury Internal Revenue Service.
How does one become an enrolled agent?
The license is earned by passing a comprehensive examination that covers all aspects of the tax code, such as individual taxes, corporations, partnerships, estates and trusts, and ethics. The license can also be earned by working at the IRS for years in a position that regularly interprets and applies the tax code and its regulations. All candidates are subjected to a rigorous background check conducted by the IRS.
What are the differences between enrolled agents and other tax professionals?
Only enrolled agents are required to demonstrate their competence in matters of taxation to the IRS before they may represent an individual, corporation, partnership, or estate and trust before the IRS.
All enrolled agents specialize in taxes. Attorneys and CPAs may or may not choose to specialize in taxes. Enrolled agents are the only representatives who receive the license to practice from the United States government. Attorneys and CPAs are licensed by individual states.
The IRS requires enrolled agents to take professional education. They must complete 72 hours of continuing professional education (taxes) and report every three years to the IRS to maintain their licenses to practice.