A. An Enrolled Agent (EA) is a federally-authorized tax practitioner who has technical expertise in the field of taxation and who is 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.

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. The Enrolled Agent profession dates back to 1884 when, after questionable claims had been presented for Civil War losses, Congress acted to regulate persons who represented citizens in their dealings with the U.S. Treasury Department.

How does one become an Enrolled Agent?

The license is earned in one of two ways, by passing a comprehensive examination which covers all aspects of the tax code, or having worked at the IRS for five years in a position which regularly interpreted and applied the tax code and its regulations. All candidates are subjected to a rigorous background check conducted by the IRS.

How can 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.

Privilege and the Enrolled Agent

The IRS Restructuring and Reform Act of 1998 allow 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 cases involving audits and collection matters. It is not applicable to the preparation and filing of a tax return. This privilege does not apply to state tax matters, although a number of states have an accountant-client privilege.

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. NAEA 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, there are only about 46,000 practicing Enrolled Agents.

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).

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.

Why should I choose an Enrolled Agent who is a member of the National Association of Enrolled Agents (NAEA)?

The principal concern of the National Association of Enrolled Agents and its members is honest, intelligent and ethical representation of the financial position of taxpayers before the governmental agencies. Members of NAEA must fulfill continuing professional education requirements that exceed the IRS’ required minimum. In addition, NAEA members adhere to a stringent Code of Ethics and Rules of Professional Conduct of the Association, as well as the Treasury Department’s Circular 230 regulations. NAEA members belong to a strong network of experienced, well-trained tax professionals who effectively represent their clients and work to make the tax code fair and reasonably enforced.

How can I find an Enrolled Agent?

The easiest and fastest way to locate an Enrolled Agent in your area is to visit www.naea.org. The ‘Find an EA’ function located on the home page will allow you to search instantly by locality or specialty. You can also call 800-424-4339, the EA referral service. This is an unattended service, but you can request to receive your response by email, fax or mail and all calls are answered within 2 business days. You might also want to check in your local yellow pages under ‘Tax Preparation’, and look for the phrase ‘Enrolled Agent, Enrolled to Represent Taxpayers before the IRS’ or the ‘EA” credential following the professional’s name.

A. You’ve seen the ads on t.v. and heard them on the radio from the national firms promising to get the liens and levies released, and, settling your debt with IRS for pennies on the dollar. (that term really makes IRS bristle).The truth is that IRS will not release Federal tax liens unless it was there mistake in filing it in the first place.  The only way to get that lien released quickly is to pay the amount you owe in full.  Recently, however, there has been movement to withdraw the lien if you enter into a payment agreement and have direct debit.The truth about getting a bank or wage levy released is the only way is to provide IRS financial information that shows either a hardship situation, or by entering into a payment arrangement.

OFFER IN COMPROMISE

WHAT IS AN OFFER IN COMPROMISE:  An offer in compromise is a settlement between the Internal Revenue Service and taxpayer for an amount less than what is owed.

 WHAT ARE THE REQUIREMENTS OF AN OFFER:  If you have the ability to pay the amount you owe in full, either through the liquidation of assets or by a monthly payment agreement, then you don't qualify for an offer.  IRS has 10 years to collect the amount owed.  Also, before you can submit an offer you must be current in filing all tax returns, and, if self employed, must be making the required estimated tax payments.

HOW MUCH WILL I HAVE TO PAY:  You must offer net equity in assets, taking quick sale value into consideration, along with the present value of future income.

 IS IRS ACCEPTING OFFERS?:  The Internal Revenue Service is accepting more offers than in the past.  Recent changes to how IRS investigates the offer and the types of offers has made it easier for people who weren't able to fund an offer in the past, to now be able to settle their debt with IRS.

 SHOULD I GET PROFESSIONAL HELP AND WHO SHOULD I HIRE:  Any time you deal with the Internal Revenue Service, you should not do it alone, unless you are completely confident in your ability to negotiate with them.  You should hire someone that understands all of the aspects of the collection process of Internal Revenue Service, including Offer in Compromises.  A former IRS Revenue Officer who is now an Enrolled Agent is your best bet because the understand the workings of IRS.  You don't need an accountant or attorney, both are more costly and the only time an attorney would be needed is if you had to go to court against the IRS.  However, the courts cannot tell IRS to accept an offer in compromise, they can only send it back for further review.

 To get more information on this or any other issues you have with I.R.S. call me at (603) 552-5106, (978) 330-2303 or email me at bob@rhamelea.com