As a small business owner you want to reduce your tax burden but may not know what kind of professional is most qualified for the job. To save money on taxes, should you work with a CPA, an accountant, or an enrolled agent? The facts may surprise you.

Enrolled Agents Specialize in Tax

CPAs and accountants can prepare tax returns but their license does not require any tax expertise. However, enrolled agents specialize in taxes and have obtained an elite license from the IRS. If you’re looking for effective tax planning strategies and worry-free tax preparation at tax time, an EA is your best bet. Here’s why.

Enrolled Agents:

• Have completed special tax training

• Are certified by the IRS

• Stay current on changing tax legislation

Tax Services You Can Trust

As an enrolled agent, True Tax Resources offers IRS tax problem resolution, accurate tax preparation, and proactive tax planning services. To find out how we can save you money on taxes or provide help with your state or federal tax problems, call 847-653-6570 or request a free consultation online now.

Answers to common questions on Enrolled Agents

What is an enrolled agent?

An enrolled agent (EA) is a federally licensed tax practitioner who has proven technical expertise in the field of taxation. Enrolled agents are empowered by the U.S. Department of the Treasury to represent taxpayers before all administrative levels of the Internal Revenue Service (IRS) for audits, collections, and appeals. Only EAs, attorneys, and certified public accountants (CPAs) may represent taxpayers before IRS.

How can an EA help me?

Enrolled agents advise, represent, and prepare tax returns for individuals, partnerships, corporations, estates, trusts, and any entities with tax-reporting requirements. The expertise of EAs in the continuously 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 U.S. Department of the Treasury 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 EA status. NAEA members are obligated to complete 90 hours per three-year reporting period. Because of the knowledge necessary to become an EA and the requirements to maintain the license, there are only about 40,000 practicing EAs.

What are the differences between enrolled agents and other tax professionals?

Only EAs 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 EAs specialize in taxation. EAs 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 standards?

Enrolled agents are required to abide by the provisions of U.S. Department of the Treasury Circular 230, which provides the regulations governing the practice of EAs before the IRS. National Association of Enrolled Agents (NAEA) members also are bound by the NAEA Code of Ethics and Rules of Professional Conduct.

Why should I choose an enrolled agent who is a member of the National Association of Enrolled Agents?

The principal mission of the National Association of Enrolled Agents and its members is qualified, accurate, and ethical representation of the financial positions of taxpayers before governmental agencies. Members of NAEA must fulfill continuing professional education requirements that exceed the IRS required minimum. NAEA members comprise 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.

Summary

An Enrolled Agent (EA) can be a real lifesaver at tax time. Unlike other tax preparers, enrolled agents are federally li censed and have unlimited rights to represent taxpayers before the IRS. They must go through strict testing and application procedures and complete ongoing continuing education to achieve the unmatched expertise they offer you today. So, before you get in over your head, put an enrolled agent on your side.

Susan is a National Tax Practice Institute (NTPI) Fellow.

The following is text from the National Association of Enrolled Agents (NAEA) website.

NATIONAL TAX PRACTICE INSTITUTE™ (NTPI®) FELLOWS: EXPERTS IN REPRESENTATION BEFORE THE IRS

You may have noticed your tax professional uses the designation “NTPI Fellow®.” This designation is evidence of significant expertise in the representation of taxpayers before the IRS. Becoming an NTPI Fellow isn’t easy. To fully appreciate what it says about your tax professional, here’s a rundown of the prerequisites and requirements to achieve this distinction.

In order to enroll in the National Tax Practice Institute (NTPI), your tax professional must be an Enrolled Agent*, CPA or attorney. These are the only three professional groups that have full rights of representation before IRS. That means that not only can they speak directly to the IRS regarding your taxes without you being present, theycan represent you in an IRS audit, collection or appeal. If you find yourself in tax trouble, you’ll want one of these professionals by your side.

The process of becoming an NTPI Fellow often takes several years, but the learning doesn’t stop there. As a whole, NTPI Fellows are individuals who exceed IRS’ minimum standard for continuing education and are dedicated to staying on top of the latest changes to the tax code. Many Fellows participate annually in NTPI’s Graduate Level in Representation because they don’t want to miss a thing.

Now that you’re aware of what the designation represents, you’ll notice many of the nation’s top tax practitioners have earned it.

NTPI Fellows have completed a stringent, three-level program of study that covers all facets of representing clients before the IRS. They have learned to guide their clients through the often challenging maze of IRS codes, internal regulations and agency structure. Once enrolled in NTPI, attendees study a broad range of applicable topics, including:

• Communicating with the IRS

• Non-Filers

• Examination (introduction and advanced)

• Appeals (introduction, exam appeals, collection appeals and advanced appeals)

• Tax Research and Resources

• Collections

• Criminal Investigation (introduction and advanced)

• Form 1040 Audits

• Innocent Spouse

• Freedom of Information Act

• Case Resolutions

• Trust Fund Recovery

• Liens and Levies

• Correcting Bad Actions of Clients

• Bankruptcy