Enrolled Agent

Contrary to common misconception, an enrolled agent is not actually an IRS employee. The IRS has many career fields, but an enrolled agent tax preparer is not one of them. Enrolled agents are federally licensed, but they are not federally employed. Alternatively, most enrolled agents either work as self-employed independent contractors or at accounting firms. The enrolled agent profession dates to 1884, after questionable claims had been presented following Civil War losses. Congress recognized a need to regulate individuals representing citizens dealing with the U.S. Treasury and responded by passing the Enabling Act (also known as the Horse Act). Horses were the number one reason for the act, as more horses were claimed than were lost during the war – and they were seemingly all thoroughbreds or show horses. Congress was overwhelmed by the number of dubious claims they received: row boats turned into yachts, pot metal was disguised in silver, and so on.

They recognized that it wasn’t the individual owner who was making these claims, it was the person who represented them. These agents would seek people who might have a claim – right or wrong – and represent them for a percentage of what they could get from the government. President Arthur Chester signed the Enabling Act to give Congress the authority to regulate these representors. A standard was created, which included testing, moral character, background checks, and criminal records. Those who passed the requirements became enrolled agents.

When it comes to hiring someone for your tax preparation services, seek the experience, knowledge, and expertise an enrolled agent offers.