Understanding Tax Return Preparer Credentials and Qualifications Internal Revenue Service


what is an enrolled agent

EAs can represent anyone on any matter relating to taxation, collection or appeals. The only other professional with representation ability like this is a certified public accountant (CPA). EAs also have federal licenses, which means they can practice in any state. While an Enrolled Agent (EA) and a Certified Public Accountant (CPA) are skilled and authorized tax professionals. However, an Enrolled Agent is specifically focused on taxation, whereas a CPA can specialize in taxation and other financial and accounting matters. A person may be an EA and a CPA; however, one appointment does not necessarily qualify the person to serve as the other.

what is an enrolled agent

Again, the number of hours you will need to study for the EA exam depends on your level of expertise in the subject matter and the quality of your study materials. You may be able to pass the exam within 2 years by going about your life as usual and studying for the exam in your free time. But if you want to get the exam over with so you can enjoy the EA designation ASAP, you’ll have to adjust your agenda.

What is an Enrolled Agent or EA?

Want to have a remote tax expert check the return you completed online? Find out more about H&R Block’s Tax Pro Review, which lets you prep your return online and have a CPA, EA or other tax professional check your work. While both CPAs and EAs have expertise in taxes, the requirements to achieve these credentials differ. EAs and CPAs are both knowledgeable, experienced professionals who are required to maintain high ethical standards. The primary difference between an EA vs CPA is that EAs specialize in taxation, and CPAs can specialize in taxation and more. The IRS does not require any specific educational background to become an enrolled agent.

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Payroll in Practice: 10.16.2023.

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An enrolled agent is a tax professional that has been approved to represent taxpayers in matters that involve the IRS. If you want to become an enrolled agent you’ll have to pass an exam or pass the experience rule. An enrolled agent doesn’t just provide services related to dealing with IRS issues but also typically works with clients on tax planning and preparation.

Use EA exam study time wisely: Skip Content You Already Know

” Enrolled agents are tax practitioners licensed at the federal level by the Internal Revenue Service (IRS). Beyond legal matters, an enrolled agent can also serve as your neighborhood Tax Pro providing tax return filing services in-season. Or, addressing IRS letters that are sent as a result of needing to provide more documentation, filing amendments, etc.

  • The IRS Restructuring and Reform Act of 1998 provides federally-authorized practitioners (those bound by the Department of Treasury’s Circular 230 regulations) with a limited client privilege.
  • Your EA does not have to divulge information to the IRS that you’ve confided in them unless it concerns the preparation and filing of your tax returns.
  • This means EAs can represent any taxpayer, whether they prepare returns for them or not.
  • A senior-level enrolled agent with between 10 and 20 years of experience can typically expect to earn an average salary of $55,000.
  • As for occupational duties, enrolled agents are empowered to represent American taxpayers before the IRS on matters such as collections, tax appeals, audits, and any other tax issues.
  • The IRS has been bumping up the number of examinations they perform each season, so more people are calling on enrolled agents to get them through audits each year.

Section 8 of this Revenue Procedure explicitly bars individuals that are NOT an EA, CPA, or attorney from soliciting representation services (which is what “tax resolution”) is. If you have more questions about how to pass the what is an enrolled agent enrolled agent exam or how to become an enrolled agent, my enrolled agent blog can answer them. Or, for specific recommendations on which enrolled agent exam prep you should choose, feel free to leave a comment or email me.

Steps to Become an Enrolled Agent

However, they have a federal license and can represent a taxpayer in any state. They must abide by the specifications of the Treasury Department’s Circular 230, which provides the guidelines governing enrolled agents. Enrolled agents that have an NAEA membership are also subject to a code of ethics and rules of professional conduct. 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. Enrolled agents first appeared in 1884 due to issues arising with Civil War loss claims.

  • Most require at least a bachelor’s degree and at least two years of public accounting experience.
  • Next, they must pass a comprehensive three-part test called the Special Enrollment Examination that covers individual and business laws and representation issues.
  • When practicing before the Internal Revenue Service, Enrolled Agents may not use the term “certified” in describing their professional designation.
  • An enrolled agent is a tax professional with authorization from the federal government to represent taxpayers before the Internal Revenue Service (IRS) at all levels.
  • Furthermore, if you need to deal with the IRS in any capacity – for instance, in an audit – an EA can represent you, providing you with the expertise you wouldn’t otherwise have.

They’re also a great option if you need tax preparation and planning advice for an individual or business. If you’re interested in professional help with your taxes, you might be wondering what types of specialists there are and which one you need. An enrolled agent and a certified public accountant are both tax experts, but when you should work with an EA vs CPA differs based on your needs. https://www.bookstime.com/ This exam covers auditing and attestation, business environment and concepts, financial accounting and reporting, and regulation. Overall, it usually takes at least eight years to become a certified public accountant due to the necessary requirements. In some states, candidates must also work a certain number of hours under the direction of a CPA prior to being allowed to sit for the exam.

What Can You Do to Pass the Enrolled Agent Exam Faster?

You’ll also have to pay your enrollment fee to the IRS at this time. In the process, you can carve out even more weekly study time when you temporarily drop non-essential activities from your normal routine. It might not be fun, but it will be worthwhile once you’ve finished the exam and have the EA to show for it.

  • EAs could help you work through an IRS audit or a collection problem, and they can also perform bookkeeping services that could be useful for businesses when preparing tax returns.
  • You truly save time by only focusing on your weak areas, like your EA accounting skills.
  • Once you have passed the examination, there’s also a “compliance check” to verify that you have diligently filed your own taxes and have no outstanding tax debts.
  • Tax return preparers who have PTINs but are not listed in the directory may provide quality return preparation services, but choose any return preparer wisely.
  • Enrolled Agents work for tax preparation firms, or as self-employed business owners.
  • To gain EA credentials, individuals must meet a series of requirements.

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