Anyone who has even gotten an official notification from the Internal Revenue Service knows the feeling of dread and unease it causes. Even those who have filed taxes on time and sent any money owed along with it, may be momentarily concerned they have made a costly mistake. Individuals with simple returns they handle themselves, or others with slightly more complicated financial situations who turn to commercial agencies for return preparation, probably do not require the services of a professional who has taken and passed the enrolled tax agent exam.
It is more often corporations, estates, trusts, partnerships, and individuals with multiple and complicated assets who employ a specialized professional to represent them with the IRS. Along with accountants and attorneys, these agents are the only ones able to negotiate with the IRS on their client's behalf. They have the education, experience and expertise to handle complex transactions and argue taxation laws and regulations in front of government officials. Unlike some accountants and lawyers people hire to represent them, these agents don't handle anything but taxes.
These taxation experts are better paid and are usually offered more benefits than those who do not have the designation. People who are interested in becoming one of these specialized agents need to know that stringent requirements must be passed. First they will have to apply for a preparer identification number. Those who are currently working as preparers should have their number already. Next, interested applicants have to pass all three sections of a special enrollment examination and go through a compliance background check.
The first of the three part test concerns individuals. Agents must answer multiple questions regarding gathering personal information necessary for returns, itemizing assets, deductions, and credits. They must be able to review and assist individuals with financial matters.
Financial expertise in the business sector is the heart of their test's second section. Applicants will be asked to explain how they differentiate between the various kinds of business entities. They must explain how S corporations and partnerships work and how the taxes differ between the two. Agents must have a clear understanding about farming operations and what constitutes taxation exempt status.
The final section of the examination focuses on practices and procedures. The applicants have to understand what representation before the IRS entails in any situation in which them may find themselves. They have to know the proper way to prepare clients, obtain power of attorney if necessary, and understand penalties, fines, and repercussions.
Applicants who do not pass all three parts can carry over the parts they did pass for up to two years. The tests are closed book, and each section takes about four hours to complete. Approved agents must take continuing education courses to maintain their credentials. They also have to adhere to a code of ethics and professional conduct and are bound by the Department of Treasury provisions.
Individuals and businesses with multiple assets may have complicated taxation structures. They often turn to specialized agents. They feel confident they are getting the most competent and informed representation possible.
It is more often corporations, estates, trusts, partnerships, and individuals with multiple and complicated assets who employ a specialized professional to represent them with the IRS. Along with accountants and attorneys, these agents are the only ones able to negotiate with the IRS on their client's behalf. They have the education, experience and expertise to handle complex transactions and argue taxation laws and regulations in front of government officials. Unlike some accountants and lawyers people hire to represent them, these agents don't handle anything but taxes.
These taxation experts are better paid and are usually offered more benefits than those who do not have the designation. People who are interested in becoming one of these specialized agents need to know that stringent requirements must be passed. First they will have to apply for a preparer identification number. Those who are currently working as preparers should have their number already. Next, interested applicants have to pass all three sections of a special enrollment examination and go through a compliance background check.
The first of the three part test concerns individuals. Agents must answer multiple questions regarding gathering personal information necessary for returns, itemizing assets, deductions, and credits. They must be able to review and assist individuals with financial matters.
Financial expertise in the business sector is the heart of their test's second section. Applicants will be asked to explain how they differentiate between the various kinds of business entities. They must explain how S corporations and partnerships work and how the taxes differ between the two. Agents must have a clear understanding about farming operations and what constitutes taxation exempt status.
The final section of the examination focuses on practices and procedures. The applicants have to understand what representation before the IRS entails in any situation in which them may find themselves. They have to know the proper way to prepare clients, obtain power of attorney if necessary, and understand penalties, fines, and repercussions.
Applicants who do not pass all three parts can carry over the parts they did pass for up to two years. The tests are closed book, and each section takes about four hours to complete. Approved agents must take continuing education courses to maintain their credentials. They also have to adhere to a code of ethics and professional conduct and are bound by the Department of Treasury provisions.
Individuals and businesses with multiple assets may have complicated taxation structures. They often turn to specialized agents. They feel confident they are getting the most competent and informed representation possible.
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