Capital Innovations LLC in League City, Texas provides cost-efficient bookkeeping and tax services to the southeast Houston area and Galveston County, TX. We are committed to helping every client find innovative business solutions to streamline their business’ workflow.
An enrolled agent is a person who has earned the privilege of representing taxpayers before the Internal Revenue Service. They have either passed a three-part comprehensive IRS test covering individual and business tax returns, or they have experience as a former IRS employee. Enrolled agent status is the highest credential the IRS can grant. Individuals who obtain this elite status must adhere to ethical standards and complete 72 hours of continuing education courses every three years.
Enrolled agents (EAs) have the same unlimited practice rights as attorneys and certified public accountants (CPAs). EAs can represent any taxpayer before the IRS, handle any tax matter, and appear on behalf of a taxpayer at any IRS office.
EAs are licensed by the federal government. It means that they are authorized by the U.S. Department of Treasury to appear in place of the taxpayer at the Internal Revenue Service (IRS). Only EAs, attorneys, and Certified Public Accountants (CPAs) may represent taxpayers before all administrative levels of the IRS for adults, collections, and appeals.
The EA profession dates back to 1884. After questionable claims had been presented for Civil War losses, the Congress acted to regulate persons who represented citizens to the Treasury Department.
EAs advise, represent, and prepare tax returns for individuals and various entities with tax-reporting requirements. They prepare millions of tax returns each year. As experts who contribute in the changing field of taxation, it is their responsibility to effectively represent taxpayers who are audited by the IRS. They also deal with the IRS Collection Division on behalf of taxpayers.
Only EAs are required to demonstrate their competence in matters of taxation before they are allowed to represent a taxpayer before the IRS. Unlike attorneys and CPAs who may or may not choose to focus on taxes, all EAs specialize in taxation.
CPAs and attorneys are state-licensed, but EAs are the only taxpayer representatives who received their rights from the U.S. government. The EAs’ federal license allows them to represent taxpayers in any state in the U.S. and its territories.
In addition to the strict testing and application process, EAs are required to complete 72 hours of continuing professional education. The process is done every three years to maintain their status. Because it is difficult to become an EA and to keep up with the required credentials, there are no more than 30,000 active EAs in the U.S.