Why an Enrolled Agent with the IRS
An enrolled agent is a person who has earned the privilege of representing taxpayers before the Internal Revenue Service. Enrolled agents, like attorneys and certified public accountants (CPAs), have unlimited practice rights. This means they are unrestricted as to which taxpayers they can represent, what types of tax matters they can handle, and which IRS offices they can represent clients before.
Enrolled Agent vs. CPA – what are the differences?
Only enrolled agents must demonstrate to the IRS their competence in all areas of taxation, representation, and ethics before they are given unlimited representation rights before IRS.
Certified Public Accountants (CPAs) have a state license, specializing in accounting, and may or may not choose to specialize in taxes. However, unlike attorneys and CPAs, all EAs specialize in taxation.
What Are The Requirements?
Enrolled agent status is the highest credential the IRS awards. In order to become an Enrolled Agent with the IRS, individuals must:
- Demonstrate their tax expertise by either passing a three-part comprehensive IRS test covering individual and business tax returns, or through experience as a former IRS employee.
- Pass a suitability check, which will include tax compliance to ensure that you have filed all necessary tax returns and there are no outstanding tax liabilities; and criminal background
- Individuals who obtain this elite status must adhere to ethical standards and complete 72 hours of continuing education courses every three years.
Certified Financial Planner vs Enrolled Agent
A financial advisor can provide many valuable services to help you achieve your financial goals, such as developing a savings plan, creating a budget, and investing for retirement. However, not all financial advisors are tax experts. Although basic tax knowledge is a must for every advisor, few advisors take the time to specialize in taxes.
In retirement, taxes can be one of our biggest expenses.
Almost every action we take can have a positive or negative impact on our tax bill, as well as our long-term retirement. By hiring an advisor who is also an EA, you can be sure that they have extensive knowledge of tax law and will be able to help you minimize your taxes and make your retirement savings last as long as possible.