What is an EA?

The “EA” designation stands for “Enrolled Agent” and EAs are the only tax professionals who are federally licensed by the US Treasury. Attorneys and CPAs are state-licensed only. Enrolled Agents specialize in providing year-round professional tax services including tax preparation, planning and tax representation in front of the IRS. EAs can represent individuals, partnerships, corporations, estates and trusts ANYWHERE in the country and through all levels of the IRS audits, appeals and collections processes.

An Enrolled Agent's ethics and professional conduct is regulated by Internal Revenue Code §10 and Circular 230 and the IRS has Tips for Choosing a Good Tax Preparer that everyone should read and follow. The IRS can suspend or revoke our Enrolled Agent's license at any time with good cause. EAs are also required to average a minimum of 24 hours of continuing education (including ethics courses) every year.

Why do you need an EA?

If you prepare your own taxes, unless they are extremely simple you may easily pay too much tax because of missed deductions and credits. And if the IRS or state taxing authorities are insisting on tax payments for your non-filed tax returns they are probably demanding more dollars than what you really owe. Enrolled Agents are true tax professionals who can tell whether or not you really owe and if so, calculate the absolute minimum tax to pay. So no matter what your situation is, Enrolled Agents can help you get straight with the IRS or any other taxing authority.

How Do People Become EAs?

The EA designation is awarded to tax preparers who have passed a rigorous two-day tax test (or worked in specialized IRS departments for at least five years) and a thorough IRS background investigation. After qualifying, EAs are then exclusively licensed by the IRS to provide income tax expertise to clients and represent those with serious tax problems before the IRS.

Only a small percentage of the people who take the test end up passing and a smaller percentage still end up actually becomming EAs. There are only about 45,000 EAs in the United States. When I passed the test it included four parts (Individuals, Partnerships, Corporations and Ethics) and was conducted by the IRS once a year. These days the test is much easier to pass (and to take), includes only three parts (Partnerships and Corporations were combined) and can be taken conveniently online part by part.

How did EAs originally get started?

During the Civil War, the armies of the North and South would often “appropriate” local horses and other animals, food and other property as needed for the war effort without compensating the owners. These people who were wronged were later able to file claims against the U.S. Government for their Civil War losses and the Enrolled Agent (EA) designation was originated in 1884 to designate and regulate those representing these U.S. citizens who had claims. It's worth repeating that EAs are the only tax professionals who are licensed at the federal level.