Enrolled agents (EAs) are federally-authorized tax practitioners who have demonstrated technical competence in tax law and are the only taxpayer representatives licensed to practice by the Internal Revenue Service. Only EAs, attorneys and CPAs may represent taxpayers without limitation before the IRS. EAs advise and represent taxpayers who are being examined by IRS, taxpayers who are unable to pay, and taxpayers who wish to avoid or recover penalties. EAs prepare tax returns for individuals, partnerships, corporations, estates, trusts and any other entities with tax-reporting requirements. Unlike attorneys and CPAs, who may or may not choose to specialize in taxes, all EAs specialize in taxation and are required by the federal government to maintain their professional skills with continuing professional education.

Every Taxpayer has the right to retain an authorized representative of their own choosing to represent them with their issue(s) before the IRS. The Primary professional designations are any attorney, CPA, enrolled agent, enrolled actuary, or any other person permitted to represent a taxpayer before the IRS who is not disbarred or suspended from practice before the IRS. The qualified person(s) will submit a written power of attorney to represent a taxpayer before the IRS. When you select a qualified person such as an attorney, certified public accountant or enrolled agent to represent you in an interview with the IRS you do not have to attend with your representative.

It’s important to understand the difference between the designations listed above and a “Tax Return Preparer”. Anyone can be a tax return preparer as long as they have an IRS Preparer Tax Identification Number AKA “PTIN”. They must also enter the number on your return and sign the return. Most Tax Return Preparers perform their services without incident. According to the IRS “each year, some taxpayers are hurt financially because they choose the wrong tax return preparer”.  You have a choice and the IRS has a directory of Paid Tax Return Preparers to choose from.  Further, the directory has the ability to parse the information by designation.  This enables taxpayers a choice of which professional designee will prepare their return.

Most taxpayers understand what and who Attorney’s and CPA’s are. These designations are well known and respected. Did you know that there is another designation that has the right and ability to represent you before the IRS?

It’s the Enrolled Agent. “An enrolled agent is a person who has earned the privilege of representing taxpayers before the Internal Revenue Service by either passing a three-part comprehensive IRS test covering individual and business tax returns, or through experience as a former IRS employee. Enrolled agent status is the highest credential the IRS awards. Individuals who obtain this elite status must adhere to ethical standards and complete 72 hours of continuing education courses every three years. Enrolled agents, like attorneys and certified public accountants (CPAs), have unlimited practice rights. This means they are unrestricted as to which taxpayers they can represent, what types of tax matters they can handle, and which IRS offices they can represent clients before.”

Enrolled agents and the designations mentioned above practice before the IRS and are governed under the guidelines in “Treasury Department Circular No. 230 – Regulations Governing Practice before the Internal Revenue Service”.

Receiving a notice from the IRS or another tax authority can be nerve-racking. For some taxpayers, just reading the notice is a daunting task. No one is immune or insulated from an exam or audit. No income level is excluded. We can’t avoid sounding mean and unfortunately we can’t avoid being blunt; it seems that Everyone has the same odds of hearing from the IRS and no one wants to hear from those folks.

Should you receive a notice from the IRS consider an attorney, CPA or enrolled agent to help you navigate the inquiry or audit. Then gather the information used to prepare the return in question. You can call the Paid Tax Preparer who prepared your return for further advice. If you self-prepared or you no longer have a relationship with the preparer who prepared your return, consider engaging the Enrolled Agents at Saltcay Enterprises Inc.

So what can you do? First, if you self-prepare your returns keep your records in a safe and accessible place in case you need to answer a notice or refer to them for other reasons. GOOD record keeping is the key to making IRS issues go away quickly and permanently.  Taxpayers find themselves in a fire drill years after they have filed the return in question because they’ve lost or misplaced their records. A good rule of thumb is to keep your records for at least 7 years. Ask your preparer how long you need to keep your records. Everybody’s tax situation is different and when it’s time to get rid of those old records, destroy them completely. Shredding or burning them will keep you safe from Identity theft.

If you engage a professional to prepare your tax return(s) you can ask him/her how long you need to keep the records. Most Paid Preparers organize your work and the tax return(s) into a folder for your records and safekeeping. You are entitled to have your source documentation returned to you even if you decide not to have your return completed by the preparer. You have the right to review (and you should) your return prior to it being finalized and submitted.  If you find an error notify your preparer to make the necessary adjustments before it is submitted. Should you find an error or something missing after you submit your return, consider submitting an amended return. The onus of a returns completeness rest with the taxpayer.

Most paid preparers have a system of due diligence to help you accurately report your income and deductions. Ask your preparer for a tax organizer at the beginning of the tax season. This can help you gather your information, account for income and deductions and submit an accurate return. Keep the organizer with your source documents and finalized return.

To Conclude – If you find yourself in the position of answering an IRS notice, consider the Enrolled Agents at Saltcay Enterprises Inc. We will review your case and give you the options necessary to bring it to a conclusion. We state our fee schedule before any work begins.

Low-Income Taxpayers have the right to seek assistance from a Low Income Taxpayer Clinic if they cannot afford representation. If your current income is below a certain level, you may ask a “Low Income Taxpayer Clinic” to represent you (for free or a minimal fee) in your tax dispute before the IRS or a federal court. Many LITCs offer services in languages other than English. Although LITCs receive partial funding from the IRS, LITCs, their employees,  and their volunteers are completely independent of the IRS. For more information do a web search for “Low-Income Taxpayer Clinics” or refer to the IRS.gov website.