Enrolled agents are considered to be a citizen’s best form of defense when the Internal Revenue Service is conducting an audit, answering questions and providing evidence that the ordinary citizen does not have the information to do his or herself.
What is an Enrolled Agent?
Enrolled means that a person has been certified by the United States government to do a particular action. Agent means a person who is able to represent a client in the case of an audit by the Internal Revenue Service, rather than the client attending him or herself. Therefore, an enrolled agent means a person who has been certified to be able to attend an audit hearing for the IRS. Enrolled agents, along with CPAs and attorneys, are all able to perform this duty for any type of client with any type of tax problem.
What are the Requirements for an Enrolled Agent?
In order for a person to be certified as an enrolled agent, he or she must obtain a Preparer Tax Identification Number (PTIN) by applying for the number and paying the necessary fees. Then, the Special Enrollment Examination must be taken. All three parts of this examination must be passed in order for a person to become an enrolled agent. After the results of the test have been received, a prospective enrolled agent merely needs to apply for the certification and pass a tax check, meaning that all taxes have been paid. As soon as the necessary fees are paid, a person is considered to be an enrolled agent. The Internal Revenue Service requires that, in order to maintain this certification by taking educational tax classes worth at least 72 hours every three years, garner at least 16 hours per year with two on ethics, and pay the fees every three years.
Related Resource: Outside Accountant
How Can an Enrolled Agent Help?
In order to pass the rigorous Special Enrollment Examination, enrolled agents had to demonstrate a vast, in-depth knowledge of the United States tax system. This knowledge is constantly being updated every year with the continuing education requirements that need to be met in order to maintain certification. Because of this knowledge, an enrolled agent will be able to effectively represent a client in the case of an IRS audit. This increases the chances that a solution will be able to be found to mitigate the results of the audit and minimize the number of fines that will have to be paid. Enrolled agents are able to represent individuals, as well as organizations, companies, estates, trusts, and any other individuals or groups that are able to pay taxes and could therefore potentially be audited. Because of the extensive ethical training that an enrolled agent must go through, clients can be certain that they are working within the boundaries of the tax code and feel secure that they would be provided for in the case of an audit.