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Q: What are Enrolled
Agents?
A: Enrolled Agents are individuals licensed by the federal government
to represent taxpayers before the Internal Revenue Service. Enrollment
dates back to 1884, when Congress acted to regulate persons who
represented citizens in their dealings with the Treasury Department,
after questionable claims had been presented for Civil War losses.
Q: What exactly do Enrolled Agents do?
A: Unlike lawyers or CPAs, Enrolled Agents specialize in taxation.
Throughout the year they advise, represent and prepare returns for
individuals, partnerships, corporations, estates, trusts and any
entities with tax-reporting requirements. In California, for example,
the more than 4,000 members of the California Society of Enrolled
Agents prepare almost 2,000,000 tax returns each year. Enrolled
Agents' expertise in the constantly changing field of tax law enables
them to be effective representatives when taxpayers are audited
by the IRS.
Q: How do Enrolled Agents differ from other tax experts?
A: Only Enrolled Agents are required to demonstrate competence in
matters of taxation before they may represent a taxpayer. Also,
they are the only representatives for taxpayers who receive that
right from the U. S. government. (CPAs and attorneys are licensed
by the states.) An individual may become an Enrolled Agent in one
of two ways: The primary way is to pass a difficult, two-day examination
given annually by the IRS. The test covers taxation of individuals,
corporations, partnerships, estates, trusts, procedures and ethics.
The other way is to have been an employee of the Internal Revenue
Service for five years, regularly applying and interpreting the
provisions of the Internal Revenue Code and regulations.
Q: Are there other requirements?
A: Over the years, an average of one-third of individuals taking
the examination has passed, allowing them to apply for enrollment
and subject themselves to a background investigation. In addition
to the stringent testing and application process, Enrolled Agents
are required to earn 72 hours of continuing professional education,
reported every three years, to maintain their status. Because of
the difficulty in becoming enrolled and maintaining that enrollment,
there are fewer than 34,000 Enrolled Agents in the United States.
In contrast, there are about 375,000 certified public accountants
(CPAs) nationwide. |
