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Posted by Jim McClaflin, EA, NTPI Fellow, CTRC

Enrolled Agent: Why do you need one?

Enrolled Agent: Why do you need one?

Any tax advisor who is licensed to stand for you before Uncle Sam is called an enrolled agent. It could be when filing a tax return, taking care of an audit, appealing a fine or solving payment issues. 

Enrolled agents are generally licensed in two different ways:

  1. Passing the Special Enrolment Examination that covers the entire aspect of the business and individual tax laws. It also involves issues like tax practice, procedures and representation. It is also compulsory for them to complete 72 hours of education courses to maintain their status every three years.

  1. Five years of experience or more with the IRS might qualify one for an enrolled agent status without the exam. As a result, many former IRS agents switch to become enrolled agents, although present IRS staff cannot be certified enrolled agents.

How can an enrolled agent help you?

All enrolled agents are bestowed with a status known as unlimited practice rights (or unlimited representation rights). The implication is that individuals, businesses, or entities can get help from them for their tax issues. Here are what to expect with an enrolled agent 

  • Assist with planning your taxes

  • Hold your hands when the tax rule gets complicated 

  • Help you prepare, sign and file the tax return

  • Stand for you before Uncle Sam for audit, payments or other issues

  • Help you with other tax matters

CPA, Enrolled Agents and an Attorney: What are the differences?

Other tax pros have unlimited practice rights like CPAs and attorneys. So what makes an enrolled agent special?

Mainly, enrolled agents stand out as their specialists on tax majorly, with a laser focus on tax compliance issues. However, attorneys and CPAs do not have this speciality.

As a result, if your tax situation seems pretty complicated that tax filing software does not help, consider going for a professional like an enrolled agent to help with this case. 

Attorneys and CPAs will generally help with more complicated issues like:

  • Help you reduce the stress of your business taxes

  • Help you establish a business in a manner that diminishes taxes 

  • Help plan an estate while factoring in taxes. 

CPAs are not tax specialists as their services are many and take care of the entire accounting world. This includes estate planning, corporate planning, financial planning and others. For businesses that need a professional to advise on how to structure their business to get the least tax liability, a CPA with experience in filing and compliance can help. 

On the other hand, an attorney doesn’t necessarily have to be specialized in tax issues, for everything outside of accounting and simple tax advice like starting or dissolving a business, examining a business deal, or getting sued.


How to Know if Someone is an Enrolled Agent 

Here is a helpful tool from Uncle Sam to know if someone is a licensed enrolled agent. You can also use it to find certified agents in your vicinity. 

All you have to do is select the country, type the zip code and your specific search radius. Click the “enrolled agent credential” and search.

You will get an alphabetical list of all licensed enrolled agents near you with their other certifications.


How to Know I have a Legitimate Tax advisor. 

For people concerned about the legitimacy of their tax advisor, Uncle Sam recommends checking them out at the Better Business Bureau. One can also request that Uncle Sam verifies the authenticity of any agent by sending a mail to epp@irs.gov, supplying the first and last name of the agent.  

In your best interest, stay away from agents whose charge is a percentage of your tax refund. This is not a professional way to bill. Also, ensure that your agent e-file as Uncle Sam specifies tax preparers who file for more than ten client files electronically. 

Make sure to review any tax document you want to send to Uncle Sam, and ensure the preparer attests all documents with their signature and include their PTIN. CPAs, attorneys and licensed enrolled agents all have Preparer Tax Identification Numbers and must consist of them on any return they are filling. 



Jim McClaflin, EA, NTPI Fellow, CTRC
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