Legally representing a taxpayer – whether they are an individual employee or the owner of a business – is something that only Certified Public Accountants (CPA’s), lawyers and Enrolled Agents are permitted to do. The Internal Revenue Service (IRS) recognizes those individuals who are qualified to do so, but of the three, Enrolled Agents are the only ones required to prove their taxation and taxpayer representation competency to them.

If you’re a taxpayer and have been chosen to receive an audit by the IRS, or if you’re appealing a ruling that the IRS have made against your case, then you will likely choose to hire a professional tax consultant to present your side of the case to the IRS. This can be a very serious matter in some cases, and not getting the information right or not presenting it in the correct manner, can lead to further complications and even costly penalties. Representing yourself, as the taxpayer in question, is of course your right, but hiring someone who understands the intricacies of the tax system and subsequent laws, is always going to be able to present your case in a more professional manner.

What qualifications must Enrolled Agents have?

EA’s must have completed three separate Special Enrolment Exams focusing on the taxation of individuals and businesses, as well as rules and ethical guidelines around representation and business practices and procedures, in order to qualify, and once they’ve done so, they can go on to apply to the IRS for acceptance as an Enrolled Agent.

To protect individuals and to ensure that they are represented in the best manner possible, the IRS requires accepted Enrolled Agents to complete 72 hours of continuing education every three years, to maintain their skills and knowledge and keep their enrolment active.

Do you need an Enrolled Agent?

Taxes are part and parcel of life, whether you are self employed, work for an employer or own your own company, and there is no legal way to avoid paying them. Some people, whether because they have enough knowledge or they simply refuse to accept help, do their own filing and pay their own taxes every year. However, statistics have recently shown that many US citizens, if not the majority, pay to have a professional assist them with their taxes. If they opt for an Enrolled Agent to help them, then they can rest assured that the agent will explain every aspect of the payments and refunds that may be required or owed to them by the IRS.

You may not know that Enrolled Agents can also assist individuals and businesses with their tax planning, and since they are essentially financial planners, they can help you to avoid any nasty surprises when tax time rolls around by showing you what decisions and choices you can make throughout the year to contribute to your financial goals.

Finally, and perhaps most importantly, if you are at the receiving end of further questioning from the IRS regarding your taxes, or if you disagree with a decision that they have made, then an Enrolled Agent can ensure that you get a fair and honest hearing.