More About the Enrolled Agent Designation
An Enrolled Agent (EA) is a federally authorized tax practitioner who has earned the privilege of representing taxpayers before the IRS. Enrolled Agents have demonstrated technical expertise in the field of taxation are empowered by the U.S. Department of the Treasury to represent taxpayers before all administrative levels of the Internal Revenue Service for audits, collections, and appeals. The following topics can help you to find out more about the Enrolled Agent designation and how an Enrolled Agent can serve your needs.
History of Enrolled Agents
Enrolled Agents date back to the late 19th century (tracing back to the General Deficiency Act of July 7, 1884, or General Deficiency Appropriation Bill (H.R. 2735), also known as the “Horse Act of 1884), although they would not take on the title of “Enrolled Agent” for another eight decades. Their original function was representing U.S. citizens seeking reimbursement for having their horses and livestock commandeered by Union forces during the Civil War. After the income tax was instituted in 1913, these agents could represent citizens before the government on tax matters. In 1959 the Special Enrollment Exam (SEE) was created to qualify representatives before they could represent taxpayers before the IRS. In 1966, the Treasury Department began using the Enrolled Agent (Enrolled to Practice before the IRS) title for the professionals it licensed.
How to Become an Enrolled Agent
Becoming an Enrolled agent takes a considerable effort and time to achieve. First, you must have a Personal Tax Identification Number (PTIN). Next, you must study for and pass 3 separate exams that are known collectively as the Special Enrollment Examination (SEE). The IRS Enrolled Agent exam (SEE) is a three-part, comprehensive test that covers all aspects of federal taxation for individuals, federal taxation for businesses, and registration, practices and procedures. The exam consists of more than 250 questions and requires significant preparation and study. One you achieve a passing score on each of the 3 exams, you must apply for enrollment online or complete Form 23 and submit it via mail with your payment. After you submit your Form 23, a tax compliance check will be conducted to ensure you have filed all necessary tax returns. A thorough background check, including an FBI background check, is also part of the 60 to 90 day review of your application to be an Enrolled Agent.
The Minnesota Society of Enrolled Agents is a state affiliate of the National Association of Enrolled Agents (NAEA). The national affiliate provides a directory of Enrolled Agents. Find the link to the directory here: NAEA Directory
What are the differences between Enrolled Agents and other tax professionals?
Only Enrolled Agents are required to demonstrate to the IRS their competence in matters of taxation before they may represent a taxpayer before the IRS. Unlike attorneys and CPAs, who may or may not choose to specialize in taxes, all Enrolled Agents specialize in taxation. Enrolled Agents are the only taxpayer representatives who receive their right to practice from the U.S. government (CPAs and attorneys are licensed by the states).
What does the term “Enrolled Agent” mean?
“Enrolled” means to be licensed to practice by the federal government, and “Agent” means authorized to appear in the place of the taxpayer at the IRS. Only Enrolled Agents, attorneys, and CPAs may represent taxpayers before the IRS.
How can an Enrolled Agent help me?
Enrolled Agents advise, represent, and prepare tax returns for individuals, partnerships, corporations, estates, trusts, and any entities with tax-reporting requirements. Enrolled Agents’ expertise in the continually changing field of taxation enables them to effectively represent taxpayers audited by the IRS.
Are Enrolled Agents required to take continuing professional education?
In addition to the stringent testing and application process, the IRS requires Enrolled Agents to complete 72 hours of continuing professional education, reported every three years, to maintain their Enrolled Agent status. Orange County Chapter members are obligated to complete 90 hours per three-year reporting period. Because of the knowledge necessary to become an Enrolled Agent and the requirements to maintain the license, as of May 21, 2018, there are only about 55,000 practicing Enrolled Agents nationally (source: National Association of Enrolled Agents)
Are Enrolled Agents bound by any ethical standards?
Enrolled Agents are required to abide by the provisions of the Department of Treasury’s Circular 230, which provides the regulations governing the practice of Enrolled Agents before the IRS. NAEA members are also bound by a Code of Ethics and Rules of Professional Conduct of the Association.