Money Health: The Benefits of Hiring an Enrolled Agent for Tax Issues

With the holidays often comes over-spending, buyers remorse and a little post holiday guilt. Implementing a healthy lifestyle entails eating right, maintaining a regular fitness routine and keeping a toxic-free home, but it also involves mental health and financial wisdom. If you went a bit overboard, take a deep breath and relax. You can get your finances back on track and ready for tax season with a dash of preparation and sprinkle of fiscal knowledge.

When hiring any type of financial professional, it’s important to determine what your needs are. Because there are a variety of roles and positions in the field of finance, you may find that certain professionals are better suited to your financial situation. If you’re looking for someone to help you manage your money in a more strategic manner, you’ll likely want to enlist the help of a financial advisor. Perhaps you’re looking for accounting services for your small business. In this case, a CPA would likely be better suited to your situation. However, when it comes to taxes, in both preparation and resolution, many find they need to enlist the services of an enrolled agent.

What Is an Enrolled Agent?

In order to understand whether you might benefit from hiring an enrolled agent, you first need to understand what it exactly is that they do. An EA is a professional tax practitioner that’s been authorized to represent tax payers in front of the IRS. Most enrolled agents work directly with tax preparation, but there are some who are specialized in dealing with tax resolution issues.

There’s a fun bit of history behind the title of this profession. Enrolled agents first came about thanks to the Civil War. When the Congress was presented with some suspect claims regarding Civil War losses, they started regulating which individuals could represent citizens in their interactions with the U.S. Treasury Department. These days, enrolled agents are licensed to practice through the federal government. Enrolled agents, along with CPAs and attorneys, have unlimited rights to represent a taxpayer to the IRS.

What’s the difference between EAs and CPAS and Attorneys?

Attorneys and CPAs are licensed through the state, and may or may not specialize in taxes, while every enrolled agent specializes in taxation processes.

Who Can Become an Enrolled Agent?

Hiring an Enrolled Agent means hiring someone who has passed rigorous processes to get to where they are, which can provide a measure of comfort and security to an individual who may have never hired a finance professional before. Only those who complete one of two offered paths can receive this designation. The first sees an individual working for the IRS for at least five years. Their role with the government agency during this time must directly deal with interpreting the tax code. The other path sees college graduates taking what is known as the EA Exam. This test is composed of three parts, and not all candidates pass these portions on the first (or second) try. Even after receiving their licensure, EAs are expected to continue their education in order to maintain this distinction.

How Do I Know if An Enrolled Agent Is the Right Fit?

Are you dealing with some serious tax issues with the IRS? Have you received a notice of levy or lien in the mail? Perhaps your assets have already been seized, savings accounts depleted, or car impounded. Or, maybe they’ve threatened to seize your home? If so, it’s time to enlist the help of an enrolled agent. Because enrolled agents are specialized in the area of taxation and often have years of experience with resolving issues between the IRS and tax payers, they may offer you a better chance of success than a finance professional with limited experience in this arena. Many taxpayers find themselves in the dire situation of being unable to handle their tax debt. An enrolled agent could help you navigate the convoluted IRS debt forgiveness programs available, including:

• Offer in Compromise: If you and your enrolled agent can successfully prove that paying off your debt in total would cause undue hardship, the IRS may be willing to settle your debt for a lesser amount. While it’s rare to receive approval for such a request, it does happen.
• Installment Agreement: If you simply can’t pay your debt in full right away, you can request an installment agreement. In these situations, the IRS will allow you to pay a lesser amount of your bill each month, for a period of up to 72 months. This can see you paying off your debt in full without incurring severe failure-to-pay penalties.

Find an enrolled agent today, verify their status with the IRS, and get started on relieving your tax debt. Remember, good health involves a balances mind, body and spirit. Getting your finances in good order is part of living a healthy lifestyle and will offer you the peace of mind you deserve during the holidays and every day of the year!