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With the sheer size and scope of the accounting world it makes sense that most professional firms hire CPAs as employees. However, when it comes to the tax side of accounting, particularly in the intersection with the Federal Government, the Enrolled Agent can be a huge asset to your firm!
Here are three great reasons that you and your firm should be looking at Enrolled Agents.
While a CPA is a long-standing and familiar qualification, most people are surprised to hear that Enrolled Agents were around even earlier!
The concept of the Enrolled Agent was created with the passage of the circular 230 regulations after the Civil War in 1884 with the so-called Horse Act to combat fraud in the requests for reimbursements for horses taken during the war.
Enrolled Agents are now regarded by the IRS as the highest level of tax professionals in the country. In fact, current IRS promotions state the EA is “the highest credential the IRS awards” and an “elite status.”
It typically takes around 2 years to become a CPA when you add in testing and experience requirements. However, during that time s/he cannot perform a simple task like calling IRS to get information about a client’s notice or requesting a transcript, because s/he may not be added to a Power of Attorney authority.
To become an Enrolled Agent you must pass the EA exam, a three-part exam that you may take up to 4 times within the 10-month window from May to February each year. We know of people who have passed all three parts in 3 months! The minute they have their EA you may put them on a power of attorney, along with you, from day one.
When you hire a brand new EA, even with little or no experience, you can put them on a power of attorney, along with you, from day one. EAs can log into the e-services database using their own identity, or call the Practitioner’s Priority Service and get data and reports. They can handle all IRS correspondence (with your oversight and review, of course); make all calls to get levies released; talk to IRS, state and local tax agencies on behalf of the client, set up installment agreements, or prepare offers in compromise documents – and actually speak to the government agencies about routine matters.
How many of those insidious and annoying IRS or state notices do your clients get that someone like this could take off your hands?
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