No one’s heard of Enrolled Agents, so almost anything that I were to tell you about EAs would be something you “didn’t know.” But here’s a list of 5 things that jump out to me about EAs that I would like to share.
1. We’ve been around since 1884
For a designation that no one’s heard of, the EA has existed for a long time — 130 years to be exact. The bill that created the EA designation (the “General Deficiency Appropriation Bill,” or “Horse Act of 1884) was signed into law on July 7, 1884. The short version of the reason for this law is: after the Civil War, Congress allowed citizens to submit claims for reimbursement for property losses suffered during the war. Many of these claims were fraudulent, and were being filed by representatives acting on behalf of the citizen. Thus the EA designation was created in an effort to regulate who could file claims with the government and to give the government the ability to sanction representatives who filed fraudulent claims.
2. We don’t work for the IRS
The word “agent” automatically conjures up thoughts of “IRS agent.” But we don’t work for the IRS. The term Enrolled Agent can be defined in this way: “enrolled” means that we are recognized by the U.S. Treasury and IRS to act as an “agent” for citizens when dealing with tax matters. Hence, “Enrolled Agent.”
3. There are two ways to become an EA
The EA designation is awarded by the Treasury Department after a person either 1) passes a series of exams or 2) works for the IRS for at least 5 years in a position that requires interpretation of tax law. The IRS regulates EAs.
4. The Special Enrollment Exam is not a tax preparation exam
One myth that’s out there is that the EA exam (the technical name is the “Special Enrollment Exam” or “SEE”) is an exam about tax preparation. It’s not.
The SEE contains 3 parts: individual taxation, business taxation, and “representation, practice, and procedure” (Basically, working with the IRS).
There are zero test questions that ask you to take information and create a tax return. You might need to perform calculations (I remember having questions about calculating the daycare credit; and there were LOTS of questions about basis during the business portion of the test) but not once are you asked to create a tax return.
The SEE is designed to test a person’s knowledge of the tax code and IRS procedures, because EAs are legally empowered to represent taxpayers in front of the IRS.
5. In the tax world, we are 100% equal to CPAs and attorneys
There are 3 groups of licensed professionals who have unlimited practice rights when handling tax matters for taxpayers: CPAs, attorneys … and Enrolled Agents.
I’ll go into more detail about each of these points in blog posts in the weeks to come.
“This blog post, along with comments that may follow, should not be considered tax advice. Before you make final tax or financial decisions, please secure a professional tax advisor to give you advice about your unique situation. To secure Jason as your accountant, please click on the ‘Services’ link at the top of the page.”