Transcript Slide 1

Enrolled Agent
Your Career of Choice
TACTYC
2014 Annual Conference
May 15-17, 2014
New Orleans, LA
This presentation is
sponsored by
In association with the
Louisiana Society of Enrolled Agents
And presented by
Gina Jones, EA – Delhi, LA
NAEA President 2010-2011
What is an Enrolled Agent?
• Enrolled Agents (EAs) are the only
federally licensed tax practitioners who
specialize in taxation and also have
unlimited rights to represent taxpayers
before all administrative levels of the
Internal Revenue Service (IRS) including
audits, collections and appeals.
History of
Enrolled Agents
• Enrollment dates back to 1884 when many
questionable claims were presented for
Civil War losses. Congress acted to
regulate persons who represented citizens
in their dealings with the U. S. Department
of the Treasury.
Who CAN Represent Taxpayers
before the IRS?
• Enrolled Agent – Licensed by US Treasury
• Certified Public Accountant – State
License
• Attorney – State License
What Makes Enrolled Agents Unique?
• Enrolled agents are required to demonstrate
their competence in all areas of taxation,
representation and ethics. Only then are they
given unlimited representation rights before the
IRS. EAs are the only taxpayer representatives
who receive their right to practice directly from
the U.S. Government, and the only tax
practitioners required by federal law to maintain
their expertise through continuing professional
education.
More differences….
• Unlike Attorneys or CPAs, Enrolled Agents
specialize in taxation. They advise, represent,
and prepare tax returns for individuals,
partnerships, corporations, estates, trusts and
any entities with tax-reporting requirements.
• Because EAs hold a federal license, they have
an unrestricted right to represent any taxpayer in
any state. CPAs and attorneys are state
licensed and may, or may not, choose to
specialize in taxes.
A Profession You Can Rely On
• Two things are certain in life:
Death & Taxes
The Tax Code is a continually changing field of taxation. An enrolled
agents’ expertise enables them to effectively represent taxpayers.
Does IRS care who’s preparing taxes?
• Yes! The IRS is increasing oversight of
federal tax return preparers. This
oversight is being phased in over several
years and implemented through a variety
of new regulations. This began with the
requirement that paid tax return preparers
obtain and use a preparer identification
number (PTIN).
High Demand – Countless Opportunities
•
•
•
•
•
•
•
•
Private practice – full or part time
Small & large public accounting firms
Law Firms
Corporate Accounting Departments
Investment Firms
Banks
IRS / State Departments of Revenue
Federal License not limited by state boundaries
What, exactly, does an EA do?
• Some enrolled agents work only during tax
season or by appointment only, while most
others have year-round practices. In addition to
tax preparation and representation, many EAs
offer other related services which may include:
–
–
–
–
–
Bookkeeping
Financial Planning or budgeting
Payroll Services
Financial Statement Preparation
Mortgage & Investment Services
What is Representation before the IRS?
• Acting on the taxpayer’s behalf
• Protecting the taxpayer’s rights
• Communicating with the IRS for the taxpayer
regarding his/her rights or liabilities under law &
regulations administered by the IRS
• Preparing and filing necessary documents
• Advising the taxpayer on return positions
• Representing the taxpayer at hearings with the
IRS in Examination – Collection - Appeals
Are you qualified?
• An EA applicant needs to be
•
•
•
•
•
•
Intelligent
Organized
Detail oriented
Able to adapt easily to changes
Eager to learn daily
“Normal” – test to follow!
The Bathtub Test
(A psychiatric evaluation for ‘normal’)
• Presented with a bathtub filled with water,
you are offered a teaspoon, a teacup and
a bucket. You are then told to empty the
bathtub. How would you proceed?
• A ‘normal person’ would use the bucket
because it’s bigger than the spoon or
teacup.
Right??
No! A ‘normal person’
would pull the plug!
• Are you qualified to apply as
an Enrolled Agent?
How do I become an EA?
• Applicants must:
» Pass a comprehensive examination which covers all
aspects of the tax code (Special Enrollment Exam)
(SEE)
or
» Have specific employment experience with the
Internal Revenue Service
and
» Pass a rigorous background check by IRS
Is there an educational prerequisite
to becoming an enrolled agent?
• Unlike certain educational requirements to
become an attorney or CPA, what counts
toward becoming an enrolled agent is your
knowledge of the tax code. This is proven
by passing the SEE, or Special Enrollment
Exam.
The Special Enrollment Exam
• Administered by the Department of the
Treasury in conjunction with Prometric
• Three part exam that tests knowledge of
taxation in the areas of individuals (part 1),
businesses (part 2) and representation,
practice & procedures (part 3).
• www.prometric.com/ with links available
through www.irs.gov or www.naea.org
The SEE process
• The SEE is an online examination. This
track requires that you
»
»
»
»
»
Obtain a Preparer Tax Identification Number (PTIN)
Apply to take the Special Enrollment Exam (SEE)
Achieve passing scores on all parts of the SEE
Apply for enrollment on Form 23; and
Undergo a rigorous background check which
includes a review of the applicant’s tax transcript.
Failure to timely file or pay taxes can be grounds for
denial of enrollment.
More on the SEE…..
• Prometric maintains approximately 300
test sites throughout the US and
internationally. The SEE is offered year
round except for the months of March and
April. Candidates may schedule each part
of the exam at their convenience, and in
any order.
And even more….
• The SEE is a multiple choice exam, and each question
has four potential answers. The question styles may
include direct questions, incomplete statements or “all of
the following except” questions. Each part of the exam is
approximately 100 questions.
• Test results are available immediately following the
exam. If failed, each part may be taken up to 4 times in
any testing year. Candidates have a two year window
from the time they pass the first part to pass the
remaining two parts of the exam.
Is there help to prepare for the SEE?
• There are many vendors who offer study
programs, both online and in-person
review classes. As a student, you learn by
completing study assignments and
quizzes. Some have periodic facilitatorled conference calls. There are separate
courses for each part of the 3-part test,
ranging from 6 to 10 weeks each.
IRS Experience
• The second track available to become an
enrolled agent is by virtue of past service
and technical experience with the IRS that
qualifies you for enrollment. The tenure
must be at least five years in a position
which regularly interpreted and applied the
tax code and its regulations. Candidate is
still subject to background check.
Any requirements to keep my license?
• In addition to the stringent testing and
application process (including background
check) the IRS requires EAs to complete
72 hours of continuing education, reported
every three years, to maintain their
enrolled agent credential. EAs renew on a
staggered schedule, based on the last
digit of their social security number.
Additional Association Requirements
• Some member associations have greater
educational requirements. For example,
the National Association of Enrolled
Agents (NAEA) requires its members to
complete 30 hours of CE each year. Due
to the expertise necessary to become an
EA and the requirements to maintain the
license, there are currently only about
46,000 practicing enrolled agents.
Ethical standards?
• Enrolled agents are required to abide by
the provisions of the Department of
Treasury’s Circular 230, which provides
the regulations governing the practice of
enrolled agents before the IRS.
OPR and RPO
• Enrolled agents, like CPAs and attorneys,
are governed by the provisions of the
Department of Treasury’s Circular 230.
The Office of Professional Responsibility
(OPR) and the Return Preparer Office
(RPO) provides oversight to the enrolled
agent profession, including testing and
renewal of credentials.
Professional Standards
• Circular 230 describes professional duties
in 3 categories:
• Personal Duties – compliance with business & personal tax
obligations and behaving appropriately when interacting with
clients and the IRS
• Duties to clients – using due diligence in providing advice,
alerting the client to errors and avoiding conflict of interest
• Duties to the system of tax administration – prompt action on
pending cases and adhering to standards for quality tax
advice
Must I do all types of tax returns?
• No, you can limit your practice to the types
of returns you prefer or specialize in
certain fields. Some enrolled agents do
not prepare tax returns at all, but instead
limit their practice to Representation and
Tax Collection or consultation matters. An
EA is not required to have prepared the
tax return in order to represent the
taxpayer under examination.
How much money will I make?
• Because of the different types of tax
practices, there is no definite answer to
this question. It will depend on experience
and time devoted to building a practice.
Essentially, enrolled agents have unlimited
earning potential.
Questions?
Now’s the time…..
For additional information, please contact:
Gina Jones, EA @ [email protected]
Member: Louisiana Society Enrolled Agents
www.louisianaenrolledagents.org
Member: National Association of Enrolled Agents www.naea.org