Completing your taxes can be a nightmare when you own a business or have an unusual personal tax situation. It’s even worse if the IRS decides to conduct an audit.
That’s why it’s a good idea to enlist an Enrolled Agent to help you right from the start. An Enrolled Agent (EA) is a person who is licensed to practice by the U.S. Department of Treasury and authorized to appear in a taxpayer’s place at the IRS for audits, collections and appeals. Unlike CPAs, who do all types of accounting for businesses, EA’s specialize in preparing taxes and in tax resolution issues.
Enrolled Agents have either passed a comprehensive examination that covers all aspects of the tax code or have worked for the IRS for at least five years in a role that involved interpreting and applying tax codes. To keep the EA designation, agents must take 72 hours of continuing education every three years.
Here’s what to consider when you’re searching for a qualified Enrolled Agent to work on your behalf:
- Look for membership in the National Association of Enrolled Agents (NAEA). The NAEA has more stringent continuing education requirements (90 hours every three years) and members must adhere to a stringent code of ethics and rules of professional conduct.
- Ask about their other qualifications. How long has the EA been in business? Does he/she work with businesses or personal situations like yours on a regular basis?
- Do your philosophies mesh? As the EA about their approach to taxes. If you’re very conservative when it comes to tax preparation, you would probably not be comfortable with an EA who likes to push the limits when it comes to taking advantage of every possible tax strategy.
- Ask about the services that the EA provides and the fees that they charge for them. What happens if you get audited?
- How well will you communicate over the long term? Does the EA return calls quickly? Is the staff helpful when the EA is out of the office? You need to feel comfortable knowing that when you need assistance with a tax issue the enrolled agent you hire will be there to back you up and provide it.