As an enrolled agent you have the authority to represent taxpayers who have to appear before the IRS for audits, collections and appeals. You must be a certified public accountant to act in this capacity and there are limitations on the types of representation you can provide, the types of tax matters you can handle and the types of IRS cases that you can deal with. In the title of the certification, ''enrolled'' means you are licensed to practice by the US Federal Government and ''agent'' means you can appear in the place of a taxpayer.
All enrolled agents specialize in taxation, unlike general accountants and CPA’s who work in all areas of the accounting industry. You do have to be licensed by the state in which you practice and pass a state exam. This means you can only represent the taxpayers from that state, even though this certification is a national one. In order to become an enrolled agent, there is a rigid testing procedure that lasts two days. The exam is very comprehensive and covers the following areas:
- Individual taxation issues
- Taxes for corporations
- Regulations regarding the taxation of partnerships
- Estates and trusts
- Taxation procedures
- Ethics issues for enrolled agents
Once you pass the exam and become licensed as an enrolled agent, you must complete seventy-two hours of professional continuing education every two years. You do have to submit proof of the courses you take to the IRS to renew your license. The continuing education can take the form of courses in a university or college, online courses or attendance at professional development seminars or meetings. The ethical standards for this position are included in Circular 230 of the US Treasury Department and any violation of these standards will result in immediate revoking of your license.
As an enrolled agent you do have a limited amount of client confidentiality. This privilege is only for cases where the taxpayer has to appear before the IRS for audits and collection issues. If the taxpayer has to appear because of issues arising from the preparation and filing of his/her income tax return, then there are no confidentiality privileges at all. Whatever the client tells you about the case, you are obligated to relate that to the IRS officials.
You will have to undergo an extensive background check by the US treasury Department to become licensed as an enrolled agent. This is to ensure that you have a high moral and professional character and that although you will represent your clients to the best of your ability, you will not abide any suggestions of fraud or criminal activity in their financial records. You can be a public accountant working in an accounting firm with a large clientele or you can have your own business dealing with taxation issues.
