The role of an Enrolled Agent can be confusing to many, and as a result, some small business owners may not fully understand how an EA can help with their taxes and hence are unsure as to whether they would benefit from their services.
Here are Enrolled Agents in a little more detail:
What is an Enrolled Agent?
EA’s are tax professionals that are similar in many ways to CPA’s and tax attorneys and can help businesses with their tax returns. In addition, they can represent you before the IRS in many tax matters, unless you are required to attend Tax Court, in which case an attorney must represent you.
The role of the EA has changed over the years, and now includes the preparation of many tax forms, and the ability to negotiate with the IRS on behalf of their clients.
Enrolled Agents and the IRS:
Since enrolled agent status is the highest credential awarded by the IRS, they can legally represent taxpayers before them. A strict code of ethical standards and many hours of continuing educational courses must be adhered to by all EA’s.
What do Enrolled Agents do?
Many enrolled agents have accounting practices and are in direct competition with CPA’s, bookkeepers and other forms of accountants. Their enrolment is a federal designation, permitting them to work across borders, whereas CPA’s and attorneys must adhere to the requirements of whichever state they wish to practice in.
What are Enrolled Agents not able to do?
While EA’s often perform accounting tasks and even audits, when a public company file its’ financial statements with the Securities and Exchange Commission, they need a professional who can express an ‘unqualified’ opinion, and this is something that an EA cannot do.
Does Your Small Business Need an Enrolled Agent?
An EA can prepare all your business taxes and even represent you should you be chosen for an audit by the IRS, while also able to fulfil many of the duties that an accountant is expected to fulfil. EA’s are tax professionals through and through, and there is precious little that they don’t know about filing, deductions, laws and how best to help small businesses stay on the right side of the IRS. So yes, your business may well need an Enrolled Agent!
Many tax consultancy firms have at least one EA on their team, and so finding one to help you and your small business should not be difficult. Finding one that you like and who works well with you may not be so straightforward, but as they are highly qualified and professional, they will always have the best interests of your business in mind, and this is the most important factor when outsourcing accountancy roles.