| The director of the IRS Office of Professional | | | | with respect to any entity, transaction, plan or |
| Responsibility, reserves the enrolled agent designation | | | | arrangement. |
| (EA) for individuals who demonstrate special | | | | Certain tasks do not constitute practice before the IRS |
| competence in tax matters. The enrolled agents tax | | | | and may be performed by anyone, for the moment |
| proficiency is validated to the IRS by passing a tedious | | | | anyway. These tasks include preparation of a tax |
| three-part examination. Many people incorrectly refer | | | | return, appearing as a witness for a taxpayer before |
| to EA's as enrolled IRS agents, even though technically | | | | the IRS, and furnishing information at the request of the |
| the EA represents the taxpayer and not the IRS. Such | | | | IRS. Tax return preparers, who are not regulated |
| a thing as an enrolled IRS agent does not exist. A | | | | under Treasury Circular 230, are known as unenrolled |
| former IRS employee may apply to become an EA | | | | tax return preparers. The term "tax return preparer" |
| without passing the enrolled exam, provided they have | | | | means any person who prepares for compensation, or |
| a minimum of 5 years continuous employment with the | | | | who employs one or more persons to prepare for |
| Internal Revenue Service during which the applicant | | | | compensation, any return of tax, or any claim for |
| must have been regularly engaged in applying the | | | | refund of tax. A person may be a preparer without |
| regulations relating to income, estate, gift, employment, | | | | regard to professional status, educational qualifications, |
| or excise taxes. | | | | nationality, residence, or business location. It is not |
| Enrolled agents, Certified Public Accountants, and Tax | | | | necessary to prepare the entire return, a person is a |
| Attorneys must follow the rules contained Treasury | | | | considered a preparer as long as he prepares a |
| Department Circular 230. This document, available on | | | | substantial portion of the return. |
| the IRS website, contains the framework for the | | | | Soon the IRS Office of Professional Responsibility will |
| regulation and registration requirements that these | | | | require all tax return paid tax return preparers who are |
| professionals must follow in order to represent | | | | not attorneys, certified public accountants or enrolled |
| taxpayers before the IRS. These Circular 230 | | | | agents to take a competency test. Currently any |
| professionals are duty bound to adhere to the strict | | | | person may prepare a federal tax return for any other |
| rules and regulations that govern their practice. These | | | | person for a fee. There are no minimum competency |
| individuals are considered to "practice before the IRS." | | | | standards. The IRS plans to require that paid tax return |
| Practice before the IRS comprehends all matters | | | | preparers who are not attorneys, certified public |
| connected with a presentation to the IRS relating to a | | | | accountants, or enrolled agents pass an IRS |
| taxpayer's rights, privileges, or liabilities under laws or | | | | competency test. It should be noted that certified public |
| regulations administered by the IRS. Such | | | | accountants, attorneys and enrolled agents already |
| presentations include, but are not limited to preparing | | | | take competency tests. However, in the future the IRS |
| and filing documents with the IRS for a taxpayer, | | | | will study tax return accuracy of attorneys and |
| corresponding and communicating with the IRS, | | | | certified public accountants to ensure that this |
| representing a taxpayer at conferences, hearings, or | | | | exemption to testing requirements is warranted. |
| meetings with the IRS and rendering written advice | | | | |