What does it mean when a tax professional has an “EA” designation? He’s an enrolled agent.
An enrolled agent or EA is a tax professional who has passed an Internal Revenue Service test covering all aspects of taxation. He must also have passed an IRS background check. He is literally a tax expert. He’s “enrolled” because he is specially licensed by the federal government. There are only about 46,000 EAs in the U.S. as of 2016.
The IRS Test
The IRS examination is eight hours over two days. It’s called the “Special Enrollment Examination” and it covers all aspects of federal tax law, including taxation of individuals, corporations, and partnerships. It includes various regulations governing IRS collections and audit procedures.
A tax professional might also qualify as an EA if he has worked for the IRS for at least five years in a position that requires extensive knowledge of the tax code and its applications.
What Does an EA Do?
Like CPAs and tax attorneys, EAs can handle all types of tax matters and can represent their clients’ interests before the IRS. The client does not necessarily have to be present — EAs are authorized to appear in place of their clients. Enrolled agents focus exclusively on tax accounting.
EAs have some limited client privilege under the terms of the IRS Restructuring and Reform Act of 1998.
The Act provides for confidentiality between the agent and his client under some circumstances involving audits and collections: Your EA does not have to divulge information to the IRS that you’ve confided to him unless it concerns the preparation and filing of your tax returns.
Is the Designation Permanent?
EAs must complete 72 hours of continuing education courses every three years.
Those who are also members of the National Association of Enrolled Agents must complete 30 hours per year for three years for a total of 90 hours.
The EA designation may be revoked by the IRS Office of Professional Responsibility for malpractice. Enrolled agents are held to the standards of the Department of Treasury’s Circular 230, which lists IRS regulations. NAEA members must additionally comply with the Association’s code of ethics and rules of professional conduct or risk losing their memberships.
How Can You Find an Enrolled Agent?
EA eligibility is stringent and exacting, so it should come as no surprise that many EAs advertise their status — deservedly so. You should find the “EA” designation following their names in professional directories or even in the Yellow Pages. You can also call 800-424-4339, an EA referral service, or visit the NAEA website.
Keep the continuing education and ethical requirements in mind if you select someone from a directory or the phone book. An EA yesterday may not necessarily still be an EA today. Do a little homework and check with the EA referral service or the NAEA as well. You can also verify an enrolled agent’s status directly with the IRS.