What is an Enrolled Agent ?
Enrolled Agents are the only tax professionals authorized to represent clients by the Federal Government (Internal Revenue Service). Enrolled Agents (E.A.), Attorneys at Law and Certified Public Accountants (CPA's), are generally unrestricted as to which taxpayers they can represent, what types of tax matters they can handle, and which IRS offices they can practice before. Unlike CPA's or Attorneys, Enrolled Agents always specialize in taxation. Because Enrolled Agents are come under the jurisdiction of the Federal Government, not the States, they can practice anywhere in the United States.
Why would this be important? Because if an Enrolled Agent loses their license, there is no where to go. It's over. If an Attorney or CPA loses their license to practice in this State, they can always go to Nevada, Texas, Florida, or Washington. Those particular States seem to be the preferred States of the disbarred.
In contrast, practice before the IRS is much more limited for other individuals such as unenrolled income tax preparers, family members, full time employees, partners, and corporate officers. At best, these people usually explain how you misled them, and it's not their fault. Even the largest tax firms use a disclaimer such as 'we can not act as your legal representative', because they themselves do not always have E.A.'s in each district to represent their clients and therefore, 'can not act as your legal representative'.
As I mentioned before, Enrolled Agents can practice anywhere in the United States, unlike CPA's or Attorneys who are regulated by State. You might be surprised to know who uses them. Many of the more prestigious Law and Accounting Firms hire Enrolled Agents to prepare tax returns for individuals, partnerships and corporations, etc, rather than use accountants whose tax knowledge may be limited. Working hand in hand with big accounting firms, you have a combination that is hard to beat but expensive.
History of Enrolled Agents Very interesting reading.
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