Don’t overlook enrolled agents at tax time

At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict , this post may contain references to products from our partners. Here’s an explanation for

Enrolled agents are tax professionals licensed to represent taxpayers before the IRS. The profession dates back to 1884. Many taxpayers claimed losses from the Civil War that were questionable, and Congress recognized a need to regulate individuals representing citizens dealing with the Department of the Treasury about their taxes. President Chester Arthur responded by creating enrolled agents.

Today, enrolled agents assist taxpayers in a number of ways:

  • They prepare tax returns.
  • They answer questions regarding national, state and local tax laws.
  • They represent taxpayers in disputes with the IRS.

Enrolled agents prepare millions of tax returns annually. They also provide tax assistance for estates, trusts, partnerships, corporations and other entities that are required to report taxes.

Comparisons to other tax professionals

What does it mean to say an individual is an enrolled agent? “Enrolled” refers to the fact that the federal government licenses these professionals. They are “agents” in that they are authorized to appear in place of a taxpayer before the IRS.

Enrolled agents differ from other tax professionals in a number of ways:

  • They are required to demonstrate their competence in tax matters before they represent a taxpayer before the IRS.
  • They all specialize in taxation.
  • They receive their authority from the federal government instead of the state government.

Attorneys and certified public accountants don’t always specialize in taxes. They also have state licenses, which limits where they can practice in the U.S.

Training and continuing education

So you want to become an enrolled agent? Or you just want to understand your tax professional’s background? Basically, there are two ways an individual can earn the designation:

  • Pass a rigorous, two-day exam administered by the IRS before undergoing a detailed background check; or
  • Work at the IRS for at least five years, regularly interpreting IRS codes and regulations.

Enrolled agents must also complete 72 hours of continuing professional education every three years to maintain their status.

Locating an enrolled agent

Contact the National Association of Enrolled Agents to find an enrolled agent in your area. You can do this in one of several ways:

  • Go to the group’s Web site and search its agent directory.
  • Call the NAEA 24-hour referral service toll-free at (800) 424-4339.
  • Write your request to the NAEA at:

    National Association of Enrolled Agents

    1120 Connecticut Avenue, NW, Suite 460

    Washington, DC 20036

Many enrolled agents are also listed in the Yellow Pages. Look under headings such as “tax preparation” and “enrolled agent.”

Here’s hoping that your tax situations never require such specialized tax help. But if you do find yourself in tax trouble one day, then an enrolled agent could be just the help you need.