Chances are, you’re probably familiar with some of the more commonly known credentials like:
- Certified Financial Planner - CFP® (that’s me!)
- Certified Public Accountant - CPA
- Chartered Financial Analyst - CFA
- Master of Business Administration - MBA
- Doctor of Philosophy - PhD
However, one that you may not have heard of, but should look for, is an EA.
EA stands for Enrolled Agent. Simply stated, this is the person you want to know when it comes to dealing with the Internal Revenue Service. These ‘cape-less superheroes’ help advise, represent, and prepare tax returns for individuals, and business entities in hopes to avoid the ire of the IRS.
This is especially important in uncertain economic times.
When money is tight, many people find themselves unable to pay their tax obligations. That, in turn, leads to the IRS putting in place more stringent policies on defaulters and taking more drastic collection efforts.
This is NOT a place you want to find yourself. To make sure you avoid an unpleasant visit from the IRS, you will want to have an experienced enrolled agent on your side.
As your Financial Mom, I want you to know how to manage every aspect of your finances -- taxes included. And I’ve found an expert on the topic of Enrolled Agent’s -- Aiysha Hayes: an EA herself, and founder of Hayes Financial & Tax Services LLC.
Take it away, Aiysha!
Enrolled Agents have been around for over 100 years – sprouting up right after the Civil War. Their license comes directly from the U.S. Treasury, which authorizes them to practice nationally and represent taxpayers residing in any of the 50 states.
Many CPAs and some Attorney’s also seek and carry the Enrolled Agent (EA) designation.
Benefits of working with an Enrolled Agent:
In the eyes of the IRS, Enrolled Agents are the nation’s tax experts. Many auditors and collection officers perk up with they see that an Enrolled Agent is representing a taxpayer.
They know that they can expect a certain level of professionalism and understanding of the tax code. Unlike attorneys and CPAs, who may or may not choose to specialize in taxes, all EAs specialize in taxation.
EAs are the only taxpayer representatives who receive their right to practice from the U.S. government (CPAs and attorneys are licensed by the states).
You never have to speak or meet with the IRS. Suppose you receive a letter or notice from the IRS questioning an item on your tax return, or stating that you owe thousands more than what you originally calculated – what will you do?
One of the best options you have available to you is to seek the trusted counsel of a reputable Enrolled Agent. Once you engage an EA as your representative (by signing a power of attorney), they essentially step into your shoes. From that point on the IRS is REQUIRED to contact your representative, and not you.
No more living in fear of a visit or call from an IRS agent!
They can represent you on ALL tax matters. EAs can help you fight against bank account levies, wage garnishments, liens and even negotiate tax debts. Your EA faces the IRS or state on your behalf during audits, audit hearings and appeals.
An unlicensed tax professional can only represent you on tax returns that they have prepared for you. Whether the EA prepared your return or not, he or she can FULLY represent you regardless of the tax matter and regardless of where you reside.
Even some attorneys and CPAs may be limited to where they can practice, geographically.
EAs can exercise privilege. The IRS Restructuring and Reform Act of 1998 allow federally authorized practitioners (those bound by U.S. Department of the Treasury Circular 230 regulations) a limited client privilege.
This privilege allows confidentiality between the taxpayer and the enrolled agent under certain conditions. The privilege applies to situations in which the taxpayer is being represented in cases involving audits and collection matters. It is not applicable to the preparation and filing of a tax return.
This privilege does not apply to state tax matters, although a number of states have an accountant-client privilege.
“Although an EA is licensed by the U.S. Department of the Treasury, they don’t work for the IRS – they work for you!!” – Aiysha Hayes
So there you have it. If you are looking for help with your business or accounting, a CPA is your best option. If you are looking for help with your taxes, an EA is the right person for advice.
Based out of Charlotte, NC, Hayes Financial & Tax Services LLC was created to meet the tax resolution and tax preparation/planning needs of individuals and small businesses. We take the time to get to know each of our clients to fully understand their individual needs and goals, as well as the goals of the business. Our team is comprised of Enrolled Agents, licensed to practice before the Internal Revenue Service in all 50 states. We are dedicated to helping individuals and businesses break free from IRS tax problems. We have experience negotiating with the IRS and know their rules, understand their tactics, and can speak their language to negotiate the best outcome for you.
Pamela J. Horack, CFP® of Pathfinder Planning LLC provides personal financial planning advice and asset management for a simple fee to young adults and working families in North and South Carolina through group classes, one-on-one planning, and ongoing advice.