What is an Enrolled Agent?

The most common question we hear when new people learn about The Tax Bakery is, “what is an Enrolled Agent?

This handy guide will explain what the Enrolled Agent (EA) designation is, how it’s achieved, and how we can help you with your taxes. Read on for the skinny.

What is an Enrolled Agent?

The Enrolled Agent (EA) credential is a professional credential awarded by the US Treasury Department through the Internal Revenue Service (IRS). The EA is the highest credential awarded by the IRS, and requires a high level of expertise in tax law and regulation.

“EA”s have unlimited rights to practice before the IRS. We represent taxpayers in all 50 states in a variety of capacities, including tax preparation, tax planning, and tax resolution. All EAs can assist taxpayers with personal and business taxes, but most choose an area of specialty. More on that later…

How Did the Enrolled Agent Come to Be?

The Enrolled Agent credential has a unique history dating back to 1884. In the years after the Civil War, many Americans made claims against the Treasury for livestock and other assets lost during the war.

Some of those claims were drummed up by “agents” representing citizens, and far less than honest. In order to combat fraudulent claims, the overwhelmed Treasury Department needed a way of regulating who could make these claims on behalf of others.

Congress passed the Enabling Act of 1884, and stringent standards for Enrolled Agent conduct and eligibility were established.

Over the 130+ years since the EA role was created, our responsibilities have changed significantly. We no longer represent citizens in claims for horses (and grand heirlooms) lost in war. These days, we are tasked with acting as representatives with the taxpayer’s best interest in mind.

What Do Enrolled Agents Do?

Modern day Enrolled Agents work with taxpayers in a variety of ways. The most common is tax preparation. Working with an experienced tax expert like an EA makes tax filing simple and stress-free.

If you choose to have an EA file your tax return, you get the benefit of their professional expertise, and the confidence that they are committed to a high standard of ethics.

Enrolled Agents also help taxpayers plan tax strategy. When high-net worth individuals and business owners evaluate their finances each year, including a tax plan that minimizing what’s owed is essential. EAs assist with that.

One of the key functions of an Enrolled Agent is representing taxpayers in tax resolution proceedings. If you’ve ever received a notice from the IRS, you know how challenging it is to get them resolved. Understanding the components of the tax law is enough to frustrate anyone.

That’s where an Enrolled Agents comes in. We’re tax experts, and are authorized to negotiate with the IRS on your behalf. Once you begin working with an EA, he/she acts as the “go-between,” and will advise you on how to handle your case.

Enrolled Agent vs. CPA

Many people believe the Enrolled Agents and CPAs serve the same function. We do not. Though some CPAs choose to specialize in tax after entering the profession, most focus on other areas of financial management.

CPAs are trained in accounting and the interpretation of financial statements. EAs are trained exclusively in tax law and regulations. The roles of both professionals can be complementary.

At the Tax Bakery, you’ll find IRS-credentialed tax experts whose #1 goal is to make filing your taxes simple. Got tax questions? Feel free to reach out.

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