Enrolled Agent – Definition

Cite this article as:"Enrolled Agent – Definition," in The Business Professor, updated September 20, 2019, last accessed October 27, 2020, https://thebusinessprofessor.com/lesson/enrolled-agent-definition/.


Enrolled Agent Definition

An enrolled agent (EA) is a tax expert who is a legal representative of taxpayers for subject matters related to the Internal Revenue Service. EA is appointed by the U.S. government authorities. To be an EA, it is mandatory for the candidate to either pass an examination or work as an IRS office, and qualify for a background check. The position of enrolled agent was created back in 1884 to handle issues related to Civil War loss claims.

An enrolled agent is a certified tax professional who has got the authority to represent handle tax-related problems of taxpayers such as collections, tax appeals, or audits. The National Association of Enrolled Agents represents certified enrolled agents, and as per this association, EAs can offer advisory services, and make tax returns for individuals, organizations, real estates, trusts, partnership firms, etc. who are supposed to make an appeal to the IRS.

A Little More on What is an Enrolled Agent

Back in the era of 1880s, there were not sufficient attorney related laws, and no CPAs existed. After the submission of illegal claims for losses suffered in Civil War, the positions for enrolled agents were created. Congress initiated to appoint enrolled agents for making claims for Civil War and representing people before the Treasury Department. In the year 1884, President Chester Arthur approved the Horse Act for regulating EAs.

However, with the passing of the 16th amendment, the responsibilities of EAs further included preparing tax, and offering tax-related solutions and handling them with the IRS. NAEA was formed in 1972 when a community of EAs partnered for stating the EAs’ preferences, and enhancing their professional growth.

Requirements of an Enrolled Agent

Enrolled agents don’t have to pursue any specific college degree. Any person who has worked as an IRS for 5 years is eligible for becoming an enrolled agent. Also, there is no exam requirement if he or she has the given experience. It is required for them to pursue education for total 72 hours every 3 years. Also, Certified Public Accountants or CPAs, and attorneys are eligible for being EAs, and they don’t have to take any related exams.

Enrolled agents are not required to obtain an authenticated state license. They receive a federal license, and have the right to represent any taxpayers in any of the regions. EAs must follow the rules and regulations specified in the Circular 30 of Treasury Department. If enrolled agents possess an NAEA based membership, they will follow adhere to an ethical code and guidelines for conducting professional activities.

Benefits of an Enrolled Agent

The members of NAEA are required to finish their ongoing education for 30 hours every year, or 90 hours every 36 months. This time duration is more in comparison to the prerequisites of the IRS position. Individuals and business organizations receive several services including tax planning, tax representation, and tax preparation from the certified EAs.

Enrolled Agents vs other tax professionals

EAs must show their expertise in every concerned area of tax, representation and ethics. However, it may or may not be possible for CPAs and attorneys to know everything about tax.

IRS doesn’t employ enrolled agents. Also, at the time EAs represent taxpayers and market their services, they need to hide their credentials. EAs can neither attach the title ‘certified’ with their title, nor display the information about working with the IRS.

Outlook for Enrolled Agents

As per the latest research, the recruitment of tax inspectors is predicted to fall 6% from 2014 to 2024. This is so because the changes in federal, state, and domestic government budget policies will have a close impact on the tax examiner sector. With the editions in rules and policies, and the extent of demand for tax related services, there will be more opportunities created for enrolled agents. EAs have a huge demand in public and private accounting organizations, legal firms, local and state government organizations, financial institutions.

References for “Enrolled Agent – EA”



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