What is an enrolled agent?

An enrolled agent (EA) is a federally licensed tax professional authorized by the IRS to represent taxpayers in audits, appeals, and collection matters, earning the credential through examination or IRS experience. For professional service firm owners, enrolled agents provide tax preparation and representation services as an alternative to CPAs.

Key characteristics

• Federally licensed by the IRS

• Can represent taxpayers before the IRS

• Specializes in taxation

• Must pass the comprehensive exam

• Continuing education required

• Nationwide practice rights

Why it matters for professional service firms

Enrolled agents specialize in tax matters and can represent you before the IRS. For tax preparation and IRS issues, EAs offer expertise comparable to CPAs at often lower cost. Professional service firm owners should consider enrolled agents for tax preparation and representation needs.

Real-world example

Jennifer needed help with an IRS notice questioning $24,000 in deductions. Hired enrolled agent: EA reviewed notice, gathered documentation, prepared response, and represented Jennifer in correspondence with the IRS. Result: all deductions sustained. EA's IRS expertise and representation authority resolved the issue without CPA fees. For tax-specific matters, EA was the ideal choice.