What is an Enrolled Agent (EA)?
An enrolled agent (EA) is a federally authorized tax practitioner who has unlimited rights to represent taxpayers before the Internal Revenue Service (IRS) on tax matters, including audits, collections, and appeals. EAs may prepare tax returns, advise on tax planning, and represent individuals, businesses, partnerships, trusts, estates and other entities in dealings with the IRS. Their authority comes from the U.S. Treasury Department rather than any single state. (Sources: IRS; National Association of Enrolled Agents (NAEA); Investopedia)
Key features at a glance
– Federal license (practice before the IRS in any state).
– Specialization in federal taxation and representation.
– Must meet qualification and suitability requirements administered by the IRS.
– Must complete continuing education to maintain enrollment.
(Sources: IRS; NAEA)
Brief history
– Enrolled agents trace their origin to the 1880s: Congress created the first enrolled agents after fraudulent Civil War loss claims prompted regulation of people representing taxpayers before the Treasury Department (the Horse Act of 1884 and related laws).
– After the 16th Amendment (1913) and the growth of the federal income tax system, EA duties expanded to include tax preparation and taxpayer representation.
– The National Association of Enrolled Agents (NAEA) formed in 1972 to represent EAs and support professional development. (Sources: Investopedia; NAEA)
How an EA differs from other tax professionals
– Enrolled Agent vs. Certified Public Accountant (CPA): EAs focus primarily on federal taxation and have unlimited representation rights before the IRS. CPAs typically have broader accounting, audit, and business advisory skills and are licensed by individual states. CPAs may or may not specialize in tax. Either can represent taxpayers before the IRS; each has different training and licensing. (Sources: IRS; Investopedia)
– Enrolled Agent vs. Attorney: Attorneys can provide legal advice, represent taxpayers in court and before the IRS, and handle non-tax legal matters. EAs specialize in taxation and IRS representation (but not court practice beyond tax court unless the EA is also an attorney). (Source: IRS)
– Unique point: EAs hold a federal credential — they don’t need a state license to represent taxpayers before the IRS. (Source: IRS)
What EAs do (typical services)
– Prepare federal (and often state) tax returns for individuals, businesses, estates and trusts.
– Represent clients in IRS audits, collection matters, installment agreements, offers in compromise, and appeals.
– Provide tax planning and compliance advice to reduce risk and optimize tax positions.
– Help with identity theft resolution and IRS notices.
(Sources: IRS; NAEA)
Requirements to become and remain an Enrolled Agent
– Qualification: Either (A) pass the Special Enrollment Examination (SEE, a three-part exam that tests individual, business and representation/practice/procedures topics) or (B) be a former IRS employee with sufficient experience (typically five years of qualifying service) and meet IRS guidelines for former employees. CPAs and attorneys are generally eligible to apply without taking the SEE. (Sources: IRS)
– PTIN: Paid preparers must obtain and use a Preparer Tax Identification Number (PTIN). (Source: IRS)
– Enrollment application and suitability: Apply to the IRS for enrollment and be found suitable — suitability includes a background check and tax compliance review. (Source: IRS)
– Continuing education: Enrolled agents must complete continuing education to maintain their status. The IRS requires a specified number of hours every three years; professional organizations (for example NAEA) may require or recommend higher annual totals and ethics training. (Sources: IRS; NAEA)
– Compliance with Circular 230: EAs must follow Treasury Department Circular No. 230, which governs practice before the IRS (standards of conduct, sanctions, and rules of practice). (Source: Treasury Circular 230)
Practical steps to become an Enrolled Agent
1. Get a PTIN (Preparer Tax Identification Number). If you plan to prepare tax returns for pay, you must have a PTIN before sitting for the SEE. (Source: IRS)
2. Decide your pathway: SEE or former IRS employee route (check IRS guidance to see if you qualify for the former-employee exception). (Source: IRS)
3. Prepare for the Special Enrollment Examination (SEE): SEE has three parts covering Individuals; Businesses; and Representation, Practices and Procedures. Study materials and review courses are widely available. (Source: IRS)
4. Schedule and pass all three parts of the SEE (or submit qualifications if you’re an eligible former IRS employee or are a CPA/attorney). The SEE is administered by an independent testing vendor. (Source: IRS)
5. Apply for enrollment: Submit the enrollment application to the IRS, pay any fees and complete the suitability (background/tax compliance) review. (Source: IRS)
6. Maintain enrollment: Complete required continuing education, maintain a PTIN and comply with Circular 230 and IRS rules. Periodically renew as required. (Sources: IRS; NAEA)
Practical steps to hire an Enrolled Agent
1. Verify credentials: Ask for the EA’s enrollment number or PTIN and verify status with the IRS or professional directories. (Source: IRS)
2. Check experience and specialization: Ask how many audits they have handled, whether they represent clients before the IRS appeals or collection units, and whether they have experience with your tax type (individual, small business, estate, etc.).
3. Ask about continuing education and memberships: Confirm they meet IRS CE requirements and ask whether they belong to professional groups (for example NAEA). (Source: NAEA)
4. Discuss fees and engagement: Request an engagement letter that spells out services, fees, scope, and representation limits. Ask whether they will sign Form 2848 (Power of Attorney) to represent you before the IRS. (Form 2848 is commonly used for IRS representation.)
5. Confirm communications and retainer policies: Understand response times, how you’ll receive notices, and who will speak with the IRS on your behalf.
6. Check disciplinary history: Ask if they’ve ever been subject to disciplinary action; you can confirm through IRS enrollment records or professional organizations. (Source: IRS)
What to expect if an EA represents you
– Unlimited representation rights: EAs can represent taxpayers before all IRS offices on any tax matter, including audits, collection and appeals. (Source: IRS)
– Use of Form 2848: To authorize representation before IRS, clients typically sign Form 2848 (Power of Attorney and Declaration of Representative). (Source: IRS)
– Ethical standards: EAs must follow Circular 230 and professional codes of conduct (NAEA members also follow a code of ethics). (Sources: Treasury Circular 230; NAEA)
Benefits of using an Enrolled Agent
– Tax-specialist focus: EAs are trained specifically in taxation and IRS representation.
– Federal practice rights: They can represent taxpayers before the IRS nationwide.
– Cost: In some cases, EAs offer representation and compliance services at lower cost than attorneys.
– Practical experience: Many EAs have years of experience dealing with the IRS and understand procedures, notices, and negotiating options. (Sources: IRS; NAEA)
Limitations and things to watch for
– EAs are tax specialists, not necessarily accountants, financial planners, or litigation attorneys. If you need state accounting, audit assurance, business valuation, or legal court representation, you may need a CPA or attorney. (Source: IRS)
– Always confirm whether the EA has experience with the specific tax issues you face (e.g., international tax, large partnerships, corporate tax controversy). (Source: NAEA)
Job outlook and demand
– Employment projections for tax examiners and related roles vary with government budgets and tax administration activity. The U.S. Bureau of Labor Statistics projected a modest decline for certain government tax examiner jobs (e.g., -4% from 2020 to 2030), but demand for tax-preparation and representation services among private taxpayers and businesses depends heavily on the complexity of the tax code, regulatory changes and enforcement activity. There is ongoing need for EAs in public accounting, law firms, corporations and government agencies. (Source: U.S. Bureau of Labor Statistics; Investopedia)
Practical checklist: Are you ready to hire an EA?
– Do you need IRS representation (audit, collection, appeal)? If yes, an EA is an appropriate option.
– Do you want a tax specialist rather than a general accountant? Consider an EA.
– Have you checked credentials, CE compliance and disciplinary history? Do so before hiring.
– Do you have an engagement letter outlining scope and fees? Get one in writing.
(Sources: IRS; NAEA)
Where to find more authoritative information (sources)
– IRS — Become an Enrolled Agent / Enrolled Agent Information / Enrolled Agents — Frequently Asked Questions: https://www.irs.gov
– Treasury Department — Circular No. 230: Regulations Governing Practice Before the Internal Revenue Service: https://www.treasury.gov
– National Association of Enrolled Agents (NAEA) — What is an Enrolled Agent?; Code of Ethics & Rules of Professional Conduct: https://www.naea.org
– U.S. Bureau of Labor Statistics — Tax Examiners and Collectors, and Revenue Agents: https://www.bls.gov
– Investopedia — Enrolled Agent (summary and historical background): https://www.investopedia.com/terms/e/enrolled_agent.asp
If you want, I can:
– Provide a step-by-step study plan and recommended resources for passing the SEE.
– Draft an interview checklist and sample engagement letter to use when hiring an EA.
– Help you verify an EA’s enrollment number and history with IRS sources.