As you already know, I have been in the bookkeeping and enrolled agent business for about a decade. What motivated me into becoming an enrolled agent was due to the lack of tax code literacy among most entrepreneurs and business owners as their business models change. Over the years, I have received multiple questions regarding what an enrolled agent is and how that plays into the realm of tax resolution. Below is typically how I respond to most new and developed clients.
What is an enrolled agent?
An enrolled agent (EA) is a federally-licensed tax practitioner who may represent taxpayers before the IRS when it comes to collections, audits, and appeals.
Enrolled agents are authorized by the Department of Treasury’s Circular 230 regulations and granted practice rights to represent taxpayers before the IRS and are authorized to advise, represent, and prepare tax returns for individuals, partnerships, corporations, estates, trust, and entities with tax- reporting requirements. Enrolled agents are the only federally licensed tax practitioners who specialize in taxation and have unlimited rights to represent taxpayers before the IRS.
An enrolled agent must also take the Special Enrollment Examination (SEE). Upon passage, they can apply for enrollment with an exhaustive background check and a review of a tax transcript.
How much privilege may you exert with an Enrolled Agent?
There is a limited client privilege as confidentiality between the taxpayer and enrolled agent exists under certain conditions when it comes to the taxpayer being in cases related to audits and collection matters. This privilege is reserved for federal taxes only and does not extend to state matters. The privilege also doesn’t extend to the process of preparation and filing of a tax return.
Hope this info helps and don't hesitate to contact us regarding your tax situation!