What is an Enrolled Agent and why does NinjaTax hire EAs?

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The Enrolled Agent designation is the only tax preparer license granted directly by the U.S. Department of Treasury. EAs are treated on par with attorneys and CPAs, as they are able to represent taxpayers before all functions of the IRS, including audits, appeals and collections. Below are the answers to common questions about EAs.

What do you have to do to be an EA?

To become an Enrolled Agent, an individual must:

• Pass a comprehensive examination that covers all aspects of the tax code, or work at the IRS for at least five years in a position that regularly interpreted and applied the tax code and its regulations.
• Undergo a rigorous background check by the IRS, including a tax compliance check.

In order to keep his or her EA designation, an Enrolled Agent must comply with all provisions of Treasury Circular 230, which governs practice before the IRS by Enrolled Agents, attorneys and CPAs. Circular 230 requires, among many other things, that an EA complete continuing professional education courses in tax-related topics and abide by certain ethical standards.

Why should I hire an EA?

Tax returns are prepared by a number of types of people: the taxpayers themselves, unenrolled preparers, attorneys, CPAs and Enrolled Agents.

Many taxpayers choose to prepare their own tax returns, often with the help of a software package or Web site. This can be a great option for people who have very simple returns. However, it can be easy to miss certain income items, deductions or credits, especially if you do not want to read hundreds of pages of IRS publications. As a result, for more complicated returns, many taxpayers choose to enlist the help of a professional.

Attorneys and CPAs are licensed and regulated by state authorities and deal with a wide range of issues. Many do not specialize in tax matters. Additionally, hiring an attorney or CPA to prepare your taxes or represent you can be very expensive.

Enrolled Agents are unique. EAs are licensed and regulated directly by the IRS Office of Professional Responsibility and are narrowly focused on tax issues. They have demonstrated special competence in tax issues and, as a result, are treated on par with attorneys and CPAs when representing taxpayers before the IRS. Because EAs specialize in taxation, you can be sure you are receiving accurate, complete, current information.

Are EAs required to take continuing professional education?

Yes. EAs are required to complete at least 72 hours of continuing professional education during each three-year enrollment cycle, with a minimum of 16 hours per year. EAs must take at least 2 hours of ethics each year. These requirements ensure that EAs keep up-to-date on changes in the tax law.

What about client privilege?

The IRS Restructuring and Reform Act of 1998 allows federally authorized practitioners (those bound by Treasury Circular 230) a limited client privilege. This privilege allows confidentiality between the taxpayer and the Enrolled Agent under certain conditions. The privilege applies to situations in which the taxpayer is being represented in cases involving audits and collection matters.

Why does NinjaTax hire EAs?

NinjaTax's professionals are Enrolled Agents. Why? For all the reasons stated above, we believe EAs have the necessary knowledge and experience to provide high-quality tax advice and customer service. At the same time, we can offer better service than attorneys and CPAs at a significantly lower cost.

Where can I find more information?

If you would like more information about Enrolled Agents, visit the National Association of Enrolled Agents and the IRS.