What Is an Enrolled Agent (EA) in Accounting?

An Enrolled Agent (EA) is a tax professional authorized by the U.S. Department of the Treasury to represent taxpayers before the Internal Revenue Service (IRS). This unique credential allows EAs to act as advocates for taxpayers in various tax matters. The “enrolled” part of the title means they are licensed by the federal government, and “agent” indicates their authorization to appear in the taxpayer’s place before the IRS. The Enrolled Agent status is the highest credential awarded by the IRS.

Enrolled Agent Practice Rights and Services

Enrolled Agents possess unlimited practice rights before the IRS. This means they are not restricted in the types of taxpayers they can represent, the nature of the tax matters they can handle, or the IRS offices where they can represent clients. This authority allows them to assist individuals, partnerships, corporations, estates, trusts, and other entities with tax reporting requirements. Their authorization stems from Treasury Department Circular 230.

EAs provide services including tax return preparation for individuals and businesses, and tax planning advice. A significant aspect of their role involves representing taxpayers during audits, appeals, and collection issues. This representation can involve negotiating payment plans, resolving tax liens or levies, and advocating for clients’ interests in disputes with the IRS. When a taxpayer receives correspondence from the IRS, an Enrolled Agent can directly communicate with the IRS on their behalf.

A limited client privilege exists for federally-authorized practitioners, including EAs, concerning audits and collection matters, allowing for confidentiality between the taxpayer and the Enrolled Agent. Unlike some other tax professionals who are licensed at the state level, Enrolled Agents receive their practice rights from the federal government. While attorneys and Certified Public Accountants (CPAs) may also represent taxpayers before the IRS, Enrolled Agents uniquely specialize in taxation.

Path to Becoming an Enrolled Agent

One primary route to becoming an Enrolled Agent is passing the Special Enrollment Examination (SEE), a three-part test administered by the IRS. This examination assesses a candidate’s proficiency across various tax domains.

The SEE is divided into three parts: Part 1 covers individual taxation, including topics like income, deductions, and credits. Part 2 focuses on business taxation, encompassing corporate, partnership, and other entity tax structures. Part 3 addresses representation, practices, and procedures, which includes ethics and the rules governing practice before the IRS. A candidate must achieve passing scores on all three parts to fulfill this examination requirement.

There are no specific education or experience prerequisites to sit for the SEE. After successfully passing all parts of the SEE, candidates must complete an application to the IRS for enrollment. The application process includes obtaining a Preparer Tax Identification Number (PTIN) from the IRS. Additionally, the IRS conducts a suitability check, which involves a background investigation of an applicant’s personal and business tax compliance.

Maintaining Enrolled Agent Status

Maintaining the Enrolled Agent designation requires ongoing commitment to professional development and adherence to ethical guidelines. Enrolled Agents must fulfill continuing professional education (CPE) requirements to keep their status active.

The IRS mandates that Enrolled Agents complete 72 hours of CPE every three years within their enrollment cycle. There is also an annual minimum requirement, typically 16 hours, to prevent EAs from accumulating all their hours in a single year. Within these CPE hours, a specific portion must be dedicated to ethics or professional conduct, generally two hours per year.

Beyond the educational requirements, Enrolled Agents must uphold strict ethical standards as outlined in Treasury Department Circular 230. This circular details the regulations governing the practice of Enrolled Agents before the IRS, covering duties, restrictions, and disciplinary actions. The renewal process for enrollment occurs every three years, and EAs must also annually renew their PTIN.