• Accounting , Regulatory ,
• 24 Mar

“Enrolled Agent status is the highest Credential the IRS awards” –IRS

An Enrolled Agent, or E.A. is a human that has earned the privilege of representing taxpayers before the IRS. They are similar to a CPA and tax attorney’s in that they have unlimited practice rights. This means that ALL tax matters can be handled by an E.A..

In order to get an E.A. you must follow one of two routes. First off you must obtain a Personal Tax identification Number or PTIN. Then you must pass all three parts of the SEE exams. Finally, you must pass a Tax compliance check by the IRS. This makes sure that you have filed all necessary tax returns and do not have any due amounts to the IRS. The second route involves being a former IRS employee for at least 5 years in one of the taxpayer-facing fields. These include being an appeals officer, special agent, revenue officer, revenue agent, tax specialist, tax law specialist, or settlement officer. Three of the five qualifying years must be withing the last five years you worked for the IRS. You also have to pass a background check. By completing all the requirements on this second route you can skip the SEE exams.

So why would I want an E.A. over a CPA or Tax Consultant or Tax Lawyer? 

Well, cost first off. Most people don’t know what an Enrolled Agent is and therefore you are likely to find an E.A. with cheaper rates than a CPA or a Tax Lawyer. Also E.A.’s specialize in taxes. This means that their tax knowledge is current and comprehensive as they often prepare tax forms.

A tax lawyer will know the minutiae of tax law, but may not file tax forms very often and when they do, it’s usually at a high cost. They have a good understanding of previous court cases that they use to set precedent to fight for your case.

My research shows that the IRS tends to view E.A.’s more favorably than the rest because they often relate to E.A.’s more so than other professions. In my personal dealings with IRS agents they can often be somewhat quiet and timid. When a Type A personality sees this type of behavior, they often see it as an opportunity to take control and command the situation. This often does not work to one’s benefit. Overbearing Tax lawyers and Fancy CPA’s can get you off on the wrong foot on first impressions so be careful in who you choose to represent you.

Whether you are an accounting student, a business owner, or just an everyday taxpayer. It is good to know what these different designations mean.