Most people mistakenly think of CPAs and Attorneys first when looking for tax help, when in fact they should seek professionals with an Enrolled Agent (EA) designation. Enrolled Agents, empowered by Congress since the late 1800’s, hold the highest credential offered to tax professionals. According to the National Association of Enrolled Agents (NAEA), “EAs are the only federally licensed tax practitioners who specialize in taxation and also have unlimited rights to represent taxpayers before the IRS. Enrolled agents advise, represent, and prepare tax returns for individuals, partnerships, corporations, estates, trusts, and any entities with tax-reporting requirements.”
When you need surgery on your shoulder, you look for an Orthopedic Surgeon with high standards and a good reputation, not Ralph’s basement discount shoulder surgery! Consumers should have the same high standards when hiring their tax professionals.” Frank Brunn, EA of Melborne, FL.
Unlike CPAs and Attorneys, who are licensed by their state and who may or may not specialize in tax law, all EAs specialize in taxation, giving taxpayers the advantage of having a true tax professional in their corner. Because the term “Enrolled Agent” is a pretty new term for most people, I will share three important reasons for having an EA in your circle:
1. Expertise in Tax Law. EAs are governed by the U.S. Department of the Treasury and have:
- Passed a rigorous exam that is 100% based on tax law, and/or
- Worked for the IRS in very specific roles for at least 5 years, giving them an insider’s advantage when defending taxpayers against the IRS
David Jelle, EA of Brooklyn Park, MN, agreed that the “testing and training requirements of EAs lend to us being more up to date on tax laws.” David has used his tax expertise to help families and business owners with tax planning strategies that have reduced their tax obligations year after year.
EAs are required to take at least 72 hours of tax law education every three years (or 24 hours annually). This requirement far exceeds the requirements and regulations of non-EAs. Many EAs have accounting, finance, law or business related degrees (Bachelors, Masters and/or PhDs) and have chosen the EA designation to demonstrate their expertise in tax law. Because of the strict requirements in place to become an Enrolled Agent and the reality that many have never heard of the EA designation, there are only about 48,000 EAs nationwide; however, this number continues to grow.
2. More for Your Money. Some taxpayers attempt to prepare their taxes on their own in an effort to save money, but “staying up to date with our tax laws can be challenging and, taxpayers who do their own taxes or hire someone who doesn’t specialize in taxation, tend to have a lot of mistakes on their returns”, explained Jay Kato, EA of Fort Lee, NJ.
On average, Enrolled Agents are known to be more economical than CPAs and Attorneys, while providing the same or higher level of service than non-EAs. I believe the fee difference is directly related to the tax specific education level of EAs. This means EAs will typically spend less time researching tax law since they are more familiar with the laws and know how to find the information they need quickly due to their required continued education.
“You get what you pay for when you hire an EA; we have better and more focused training in the area of tax law”, explained Clark Singleton, EA co-owner of Pinnacle Accounting Group in St. Louis, MO. Among other tax services, Clark specializes in tax planning for partnerships, including husband and wife owned businesses.
3. No Borders or Boundaries. So many of us are constantly on the go, moving from city to city, state to state and country to country; all of this movement can make it hard to find and keep our beloved hair stylist, realtor, doctor or attorney. However, when you have an EA on your side, moving around will never require you to lose your beloved tax pro. Enrolled Agents are federally licensed. This means, if you have a tax problem or simply need your tax return prepared, your Enrolled Agent can assist you and/or your business across state lines and foreign waters.
Rosemarie Hatch, EA, a long time tax professional based in Vero Beach, FL, has many retired clients who migrate to her warm southern state of Florida during the cold northern winters – affectionately know as “Snowbirds”. She explained, “as an EA I can work with the IRS and the different state tax agencies on behalf of my clients simply because I hold a federal license. I often share with my clients, the benefits of changing their residency to Florida, a no income tax state, to help them reduce their annual tax bills, but some are very loyal to their home states.”
Enrolled Agents are a must-have for every taxpayer looking for focused tax professionals that can give you a gift that keeps on giving – sound tax advice and services. So when choosing a tax professional, remember the obvious choice – the Enrolled Agent.