How is a Tax Attorney Different than an Enrolled Agent?

While trying to solve tax problems, you may have come across enrolled agents. Like Certified Public Accountants and tax attorneys, enrolled agents can act as your representative with the IRS. 

Like CPAs and tax attorneys an EA is entitled to practice before the IRS. This means that EAs can represent any taxpayer, handle any tax issue, and negotiate with any IRS office at the administrative level.

There are key differences between the abilities and services performed by an enrolled agent or EA and a tax attorney.

What is an Enrolled Agent?

Enrolled agent or EA is a credential awarded by the IRS. It is issued by the IRS.

An enrolled agent credential can be earned by:

  • passing a short written test by the IRS. The short three-part test covers individual and business tax topics.
  • being a former IRS employee with at least five years’ experience in one or more of the following positions:

o   appeals officer
o   special agent
o   revenue officer
o   revenue agent
o   tax specialist
o   tax law specialist
o   settlement officer

Of these qualifying years, three years must have been within the last five years from the applicant’s separation from the Internal Revenue Service.

Applicants must also pass a background check to get the EA credential. This check is mostly a compliance check by the IRS. It checks to make sure the would-be EA has filed their own tax returns.

Maintaining an EA status by continuing education of at least 72 hours every three years.

How is This Different than a Tax Attorney?

Tax attorneys are licensed by the state. Tax attorneys generally have to have a Bachelors’s degree and a Juris Doctor degree.

Tax attorneys also have to have continuing education hours each year. This may or may not include tax training.

EAs can represent taxpayers during any IRS function at the administrative level, but this authorization does not extend to the tax court or criminal matters. Only a tax attorney, or someone who passed the Tax Court Exam for Non-Attorneys, can represent taxpayers before the IRS. Only tax attorneys can help clients with criminal tax cases.

Since these professionals have the qualifications to represent taxpayers before the IRS, they may not be qualified to help with accounting issues or the legal side of tax matters.

A tax attorney can be the better choice for someone facing legal consequences due to tax issues. They can represent you in the tax court and provide choices on the most practical course of action. Tax attorneys are often more skilled in writing persuasive documents, including appeals protests, penalty abatement letters, and written tax opinions.

Most taxpayers hire an attorney when incorporating business or dissolving a business. It would also be best to consult your tax attorney when facing a tax-related lawsuit or when evaluating the tax consequences of a business deal. The same goes when you need to discharge taxes in bankruptcy.

Attorney-Client Privilege Has a Broader Reach

The attorney-client privilege is a significant advantage tax attorneys have against other tax practitioners.

There is a limited privilege that covers information shared with a CPA or an EA, but it’s not as broad as the confidentiality for communications with and work product of a tax attorney.  

Due to limits in client privilege between the EA and the taxpayer, the EA can be compelled to share information about his or her client. Any transaction which may trigger criminal scrutiny would not be covered by client privilege for EAs.

Given the limits of the services they provide, it’s better to consult a tax attorney for serious matters related to tax law. 

Look for an EA when your only concern involves tax matters that may be resolved outside of court. If you have a tax issue that goes beyond IRS administrative concern and may land you in court, consult a tax attorney to have a better understanding of your situation, options, and rights.

Do Enrolled Agents Charge Less?

Some taxpayers opt to work with an EA rather than with a CPA or a tax attorney because they feel that the EA will charge lower fees. This is not always the case. It is not uncommon for EAs to charge the same or even more than tax attorneys.

Experienced Tax Attorneys

These are just a few of the differences between tax attorneys and EAs.

We are experienced tax attorneys located in Houston, Texas. We help clients with IRS problems.

Please call us at (713) 909-4906 or schedule an appointment to see how we can help with your IRS problem.

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