An enrolled agent is a federally-authorized tax practitioner who has technical expertise in the field of taxation and who is empowered by the U.S. Department of the Treasury to represent taxpayers before all administrative levels of the Internal Revenue Service for audits, collections, and appeals.
But the more important question is not what an enrolled agent is, but rather what an enrolled agent can do for you. It’s very obvious that most people get anxious when someone even mentions tax preparation, so I want to get straight to the point.
Who They Serve
Enrolled agents serve as advisors and representatives to a variety of people or establishments filing taxes, including sole proprietorships, corporations, non-profit organizations, or any legal business entity, including international businesses, non-resident aliens, resident aliens and new immigrants.
They can prepare tax returns for an array of filers such as individuals, partnerships, corporations, estates and trusts. Because the taxation process changes every year, they must continually be trained on new strategies and procedures. Simultaneously, they are required by the IRS to have 72 hours of professional education every three years to retain their status as an enrolled agent.
What They can Offer
Tax preparations are not the only element that enrolled agents may be able to help you with. They can also help with IRS audit responses, collection matters, levies, liens and other IRS procedures.
We’re talking about trust, convenience and credibility. For some, it would be like we are handing our yearly migraine off to someone else to handle and it’s worth the price we pay for it. However, this process has also turned out to be quite a double edged sword with the potential omission of very important information. At that point it becomes a “blame-game” and things could get real ugly, real fast.
Trust and Insurance
It’s not that having an enrolled agent will solve all of the taxation problems and headaches you may have, but they are held to a higher standard than those who may be internally trained by companies or individuals that have no affiliation with the government. It’s can be a much more comforting feeling knowing that there is accountability between the US Department of the Treasury and enrolled agents.
However, even with the safeguards that Enrolled Agent Agencies and the government can set up, it is still a good idea to protect themselves as tax preparers from slip-ups that occur. Enrolled agents and agencies are able to protect themselves from litigation by purchasing professional insurance policies that protect them from accidental tax preparation errors.
How to Survive a Tax Audit
If you think there’s nothing more frightening than getting a letter from the IRS, you’re not alone, especially these days. In 2005, the IRS estimated the difference between the amount of tax money that is paid each year and the amount of tax money that should be paid, also known as the tax gap. The figure they came up with was $345 billion annually, and their concerted efforts to close that tax …
Appeals: The Appeals Examination Process December 2009