What Is An Enrolled Agent And Why Should I Hire One?

Enrolled Agent

If you want to know about what is enrolled agent then an Enrolled Agent is a tax professional with unlimited practice rights (empowered by the US Department of Treasury) to represent taxpayers before the Internal Revenue Service (IRS) at all administrative levels. In other words, an Enrolled Agent is a tax specialist who has the right to help you as an individual or your business with any tax issue.

The Enrolled Agent title is the highest awarded by the IRS, and these folks have the right to represent clients in any IRS office or State. They have the right to work across state borders because their designation is at the federal level.

Enrolled Agents help with tax issues that include audits, collections, and appeals. The only place an Enrolled Agent is not permitted to stand on behalf of his/her client is in the tax court. This is because that practice is limited to the members of the Bar of the Court. A Tax Attorney is the ideal fit for court cases.

There are two major ways by which an Enrolled Agent gets licensed:

By taking and passing the three parts of a stringent and comprehensive examination known as Special Enrollment Examination (SEE). This exam covers all aspects of individual and business tax laws including tax representation, practices, and procedures. To maintain their status, all Enrolled agents are also required to take 72 hours of continuing education, this usually includes 2 hours of ethical or professional conduct each year.

A more popular way to become an Enrolled Agent is if an individual has worked with the IRS for 5 or more years, then they can attain the Enrolled Agent status without taking the Special Enrollment Examination.

Hitherto an Enrolled Agents have all representation rights before the IRS, they are expected to show their proficiency in all areas of taxation, representation, and ethics to the IRS.
Since the Enrolled Agent status is the highest awarded by the IRS, you can be confident that they will get the job done. Moreover, they handle tax matters daily which differentiates them from you or a simple tax preparer.

Here are some of the benefits of hiring an Enrolled Agent

They are Tax Experts: Since Enrolled Agents are required to focus only on tax and tax-related issues, they have specialized knowledge. i.e., they are well versed and have a good understanding of the federal tax codes which can be a dire strait for most individuals and businesses.

Enrolled Agents ensure that your returns have a lower risk of getting fined or audited by helping you manage the technical issues. They differ from ordinary tax preparers in that they possess the authority to prepare more complex returns.

Enrolled Agents take continuing education courses every year to keep up with the changing tax code. They also utilize research tools that they usually have at their disposal to monitor updates.

They save you time and money: Preparing a tax return can be unsettling especially with the way the tax code changes each year. Moreover, you might not have the luxury of time to read the volume of materials that are added to, or deleted from the tax code each year. There is also a high chance that you do not have access to the various research tools available to Enrolled Agents.

Therefore, employing the service of an Enrolled Agent will save you from lots of guesswork that can lead you into the Internal Revenue Service’s net i.e., getting audited. I bet the thought of that can make an average American taxpayer cringe. Instead of putting yourself in an avoidable mess, you should seek the help of these Tax Experts.

Competitive costs and fees: Even though Enrolled Agent is the highest status awarded by the IRS, they are more competitively priced than the Certified Public Accountants (CPAs). The Enrolled agents have lower overhead and specific tax expertise making them deliver quality service to clients at a very good price.

They are not limited by state: Another advantage of hiring an Enrolled Agent is that they are not limited by geography, hence you can employ an Enrolled Agent from another state in the country to help you with your tax matters, or even still you can employ an enrolled agent to file your returns in more than one state, unlike the CPAs that can only practice in the state in which they are certified.

The other benefits that an Enrolled Agent affords you includes:

Suggesting ways for you to save on taxes.

Helping you make good financial plans.

Serving as your tax advisor to answer any of your tax queries, and break down complex tax codes for you in a language you can understand.

Standing in your stead before the IRS.

To sum up, seeking professional help on matters that you do not have much knowledge about will save you a whole lot. Now that you know what Enrolled Agent is all about and how they can be of help to you and/or your business, you shouldn’t hesitate in employing the service of one.