Tax Advisors

We always ask to review the past three years of tax returns to determine if anything is incorrect. If we do, then we then decide with our client whether it makes sense to file an amendment for that tax year.  It usually makes sense, if a large refund would be the end result.

ENROLLED AGENTS (EAS) ARE AMERICA'S TAX EXPERTS

Enrolled Agents (EAs) are federally-licensed tax practitioners who may represent taxpayers before the IRS when it comes to collections, audits and appeals. As authorized by the Department of Treasury's Circular 230 regulations, EAs are granted unlimited practice rights to represent taxpayers before IRS and are authorized to advise, represent, and prepare tax returns for individuals, partnerships, corporations, estates, trusts, and any entities with tax-reporting requirements. Enrolled agents are the only federally-licensed tax practitioners who specialize in taxation and have unlimited rights to represent taxpayers before the IRS. The enrolled agent profession dates back to 1884 when, after questionable claims had been presented for Civil War losses, Congress acted to regulate persons who represented citizens in their dealings with the U.S. Treasury Department. Enrolled agents’ expertise in the continually changing field of taxation enables them to effectively represent taxpayers at all administrative levels within the IRS.

PRIVILEGE AND THE ENROLLED AGENT

The IRS Restructuring and Reform Act of 1998 provides federally-authorized practitioners (those bound by the Department of Treasury’s Circular 230 regulations) with a limited client privilege. This privilege allows confidentiality between the taxpayer and the enrolled agent under certain conditions. The privilege applies to situations in which the taxpayer is being represented in cases involving audits and collection matters. It is not applicable to the preparation and filing of a tax return. This privilege does not apply to state tax matters, although a number of states have an accountant-client privilege.

CONTINUING EDUCATION

In addition to the stringent testing and application process, the IRS requires enrolled agents to complete 72 hours of continuing education every three years in order to maintain their active enrolled agent license and practice rights. NAEA members are held to a higher standard than the IRS' minimum 72 hour continuing education requirement. NAEA members must complete 30 hours of IRS-approved continuing education hours each year (which would lead to a total of 90 hours for each three-year EA enrollment cycle period). Because of the expertise necessary to become an enrolled agent and the requirements to maintain the license, there are only about 53,700 practicing enrolled agents.

THE DIFFERENCES BETWEEN ENROLLED AGENTS AND OTHER TAX PROFESSIONALS

Only enrolled agents are required to demonstrate to the IRS their competence in all areas of taxation, representation and ethics before they are awarded unlimited representation rights to represent taxpayers before IRS. Unlike attorneys and CPAs, who are state-licensed and who may or may not choose to specialize in taxes, all enrolled agents specialize in taxation.

ETHICAL STANDARDS

Enrolled agents are required to abide by the provisions of the Department of Treasury’s Circular 230, which provides the regulations governing the practice of enrolled agents before the IRS. NAEA members are also bound by a Code of Ethics and Rules of Professional Conduct of the Association.

CHOOSING AN NAEA MEMBER EA

The principal concern of the National Association of Enrolled Agents and its members is honest, intelligent and ethical representation of the financial position of taxpayers before governmental agencies. Members of NAEA must fulfill continuing professional education requirements that exceed the IRS’ required minimum. In addition, NAEA members adhere to a stringent Code of Ethics and Rules of Professional Conduct of the Association, as well as the Treasury Department’s Circular 230 regulations. NAEA members belong to a strong network of experienced, well-trained tax professionals who effectively represent their clients while striving to make the tax code fair and reasonably enforced for America's taxpayers.

HOW CAN I FIND AN ENROLLED AGENT?

You can easily locate an enrolled agent in your area by visiting the "Find a Tax Expert" website taxexperts.naea.org and searching by location or specialty. You might also want to check in your local yellow pages under "Tax Preparation," and look for the phrase "Enrolled Agent," "Enrolled to Represent Taxpayers before the IRS," or the EA credential following the professional’s name.

If it is a standard tax return, then we charge per form.

I created Tax Advisors because I was frustrated with how tax returns are normally filed through CPA firms and other tax preparation firms.  The Standard Operating Procedure (SOP) is to drop off your tax documents and then wait for several weeks to several months for a phone call that said your tax return is ready. Then, you show up at the office and pay for the service and take your new completed tax return home.  You might as well call this "drive by tax return preparation"!  There were no questions or clarifications or advice before you picked up your completed tax returns.  Many of my clients said that it felt like an assembly line process.  At Tax Advisors, we meet with every client and review the tax return with them.  During this meeting, we offer advice on how to lower their overall tax liability which will either increase their refund or lower their tax liability.  Because we have a second monitor so that clients can see their tax return, it is an interactive experience.  Many clients have told us that they finally understand how the tax system works.

We have worked simple returns to very complicated business tax returns.  We also specialize in "expat tax returns" and foreign earned income tax returns.

A client was referred to us from another long time client which is how we get most of our new clients.  Every year she had to sell stock of Exxon to pay her additional tax liability which was about $6,000 a year.  By selling the stock after the year was over, she then had to pay tax on the stock that she sold for that year.  I asked her to bring her last three years tax returns so that I could review them before our meeting.  Within a few minutes, I detected what the problem was.  When you sell stock or any other asset, you have to enter the date it was purchased and the amount and then when you sell it, you must enter in the date of the sale and the amount.  The difference is called a capital gain or loss.  In addition to being an Enrolled Agent licensed by the United States Treasury, via the IRS Division, I am also a Financial Advisor.  Because I manage investment portfolios, I realized that the cost basis entered by her previous CPA was only $13.00 a share.  I knew that Exxon stock had not been at $13.00 a share for a very, very long time.  I recommended that we file amendments on her tax returns for the last three years and change only the cost basis of the Exxon stock.  She agreed and her federal and state refunds totaled over $32,000!

Make sure that they are a regulated tax preparer which they're only three, EA, CPA & JD.  Also, do they give advice as part of the tax return process or is advice a separate charge?

Do they need a Certified Tax Specialist (EA) or a Certified Accounting Specialist (CPA)?

Do they want a tax preparer to give advice or just prepare the tax return from only the tax documents provided?

If they want advice, is it part of the tax preparation fee or a separate charge?

Do they want an assembly line process or an interactive experience?