An enrolled agent (EA) is a designation by the US Internal Revenue Service (IRS) given to individuals who meet strict qualification standards. Enrolled agents represent taxpayers before the IRS, so they need to master a variety of tax issues as well as service procedures and protocol. Agents are also required to operate under a strict ethical code when representing a taxpayer, including maintaining confidentiality and personal privacy when appropriate.
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Primary Role and Responsibilities
As federally-licensed tax experts, enrolled agents work with taxpayers who are participating in the collections, audit or appeals process. They are given wide latitude in their job and their practice rights are virtually unlimited while performing official duties. The EA position and its role in the tax system are authorized and regulated by the Department of Treasury’s Circular 230. The IRS Restructuring and Reform Act of 1998 further developed the boundaries and rights of enrolled agents.
Other Duties and Considerations
An EA may perform a number of different duties while representing a taxpayer, including consultation, financial analysis, and case preparation. They also have some degree of client privilege that allows them to maintain confidentiality under specific circumstances, according to the National Association of Enrolled Agents (NAEA). Individuals interested in becoming an EA not only need to understand the details of taxation, they should also be comfortable when navigating constantly-changing laws and regulations throughout the process.
Steps to Become an Enrolled Agent
Tax professionals who are interested in becoming credentialed as an EA first need to get a preparer tax identification number (PTIN) from the IRS. They then need to apply to take the Special Enrollment Examination (SEE) test. The IRS provides an information bulletin for candidates as well as practice questions and answers to aid in preparation efforts. Applicants must achieve a passing score on all three sections of the SEE examination before they can submit Form 23 and apply for enrollment. Employees of the IRS can be exempted from the exam requirement if warranted by their technical experience. All applicants also need to pass a tax compliance check before they receive EA credentials.
Maintaining Qualification
Obtaining enrolled agent status doesn’t mean the end of self-education and professional improvement. EAs have to renew their certification every three years to maintain their qualification by submitting Form 8554 digitally or physically. Applicants for renewal must obtain at least 72 hours of continuing education during each three-year period, with at least 16 hours performed on each year. This includes a minimum requirement of 2 hours of ethics education annually. Current EAs are advised to monitor changes in regulation or requirements every year to ensure they will meet these qualifications on their next renewal cycle.
The concept behind the EA status can trace its roots back over a century. The position and its responsibilities have changed significantly since then, but taxpayer representatives are still a relevant and necessary part of the American tax system. For many tax professionals, becoming an enrolled agent is a career-boosting accomplishment that displays professional knowledge and ability.
