Tax problems with the IRS, especially audits, can be an intimidating situation. Experts recommend that a taxpayer not go through the process alone; professional representation is needed to guide them through their options. The first inclination by many would be to call a tax attorney, but there is another option that most are not aware of: the Enrolled Agent.
Licensed by the federal government to represent individuals before the IRS, enrolled agents can advise individuals during audits, collection procedures, and the appeals process. Their knowledge of the tax code and ability to deal directly with IRS on the taxpayer’s behalf can also facilitate compromises to resolve any issues. Attorneys and CPAs are the only other professionals that can represent taxpayers before the IRS. For individuals, having an enrolled agent represent you can often be less expensive than hiring an attorney, without sacrificing the expertise needed during the process.
Enrolled agents must pass a stringent certification process by the Treasury Department. The process consists of two days of examinations covering the tax code. Enrolled agents are the only professionals to take such a test. Many former IRS agents go into private practice as enrolled agents, bringing with them a familiarity of the process. In fact, it is that familiarity with the process, and often with the people involved, that makes the enrolled agent uniquely qualified to handle individual tax problems.
Michael Brooks, an enrolled agent in Dallas, Texas, handles accounting, tax return preparation, and payroll for a number of business and individual clients, and has been able to help clients that are in over their head with tax issues.
“I have prepared ‘Offers in Compromise’ where an individual offers a lesser amount than what they owe in the hopes that the IRS will take it. That gets them back on track with the IRS if they haven’t filed in years and gets them on record as paying clients.”
There are over 40,000 enrolled agents practicing in the United States. They can be identified with the “EA” credential after their name. Most are practicing accountants, tax preparers, tax planners, and financial advisors, and an online directory of over 11,000 enrolled agents can be found at the National Association of Enrolled Agents web site at www.naea.org. You can also find an agent by calling 1(800) 424-4339. Your referral request will be answered within two business days.
Not only do enrolled agents have to abide by a strict code of ethics and professional conduct, they are required by IRS to take continuing education classes to ensure they stay up-to-date with the latest tax law changes.