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- Enrolled Actuary. People with this credential have satisfied the standards and qualifications as set forth by the Joint Board for the Enrollment of Actuaries and have been approved by the Joint Board to perform actuarial services required under the Employee Retirement Income Security Act of 1974 (ERISA).
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It is also worth mentioning the appraisers, meaning any individual who prepares appraisals supporting the valuation of assets in connection with one or more federal tax matters. Appraisers have no representation rights but may appear as witnesses on behalf of taxpayers.
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Limited Representation. Limited representation rights authorize the tax professional to represent you if, and only if, they prepared and signed the return.
For returns filed after Dec. 31, 2015, the only tax return preparers with limited representation rights are Annual Filing Season Program Participants. The Annual Filing Season Program is a voluntary program. Non-credentialed tax return preparers who aim for a higher level of professionalism are encouraged to participate.
Annual filing season program participants do not have unlimited practice rights (unless they are also an attorney, certified public accountant or enrolled agent). Their representation rights are limited to clients whose returns they prepared and signed, but only before revenue agents, customer service representatives and similar IRS employees, including the Taxpayer Advocate Service. They cannot represent clients whose returns they did not prepare, nor can they represent clients regarding collection or appeals matters.
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Other individuals who may serve as representatives. Because of their special relationship with a taxpayer, the following individuals can represent the specified taxpayers before the IRS, provided they present satisfactory identification and, except in the case of an individual described in (1) below, proof of authority to represent the taxpayer.
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- An individual can represent himself or herself before the IRS and does not have to file a written declaration of qualification and authority.
- A family member. An individual can represent members of his or her immediate family. Immediate family includes a spouse, child, parent, brother, or sister of the individual.
- An officer. A bona fide officer of a corporation (including a parent, subsidiary, or other affiliated corporation), association, or organized group can represent the corporation, association, or organized group. An officer of a governmental unit, agency, or authority, in the course of his or her official duties, can represent the organization before the IRS.
- A partner. A general partner may represent the partnership before the IRS.
- An employee. A regular full-time employee can represent his or her employer. An employer can be, but is not limited to, an individual, partnership, corporation (including a parent, subsidiary, or other affiliated corporation), association, trust, receivership, guardianship, estate, organized group, governmental unit, agency, or authority.
- A fiduciary (trustee, executor, personal representative, administrator, receiver, or guardian) stands in the position of a taxpayer and acts as the taxpayer, not as a representative.
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| When it comes to the IRS, matters are never simple. Professional help is always the best option in making any important decision that may impact your personal financial situation. |
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With every NL we urge you to enroll services from a tax professional to make sure that you comply with all the legal requirements and, at the same time, you take advantage of all the credits and deductions you are entitled to.
Many of you already use a tax professional to prepare your taxes. Tax professionals with an IRS Preparer Tax Identification Number (PTIN) can prepare a return for a fee. If you are being audited by the IRS, it is not required to have someone represent you. However, it is recommended that you have someone on your side during the process. You should also know there are several kinds of IRS audits.
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Correspondence Audit is a letter from the IRS Service Center requesting that you send in copies of your canceled checks and/or receipts in order to verify certain deductions on the return.
There is also the notice of an Office Audit, again sent by mail. The letter identifies specific items on the return that are in question and requests that you or your representative bring certain documents to the local IRS office for the auditor's examination.
With a Field Audit, the IRS agent, personally, will call the owner/president/ general partner and notify him/her that the return has been selected for audit. This type of audit is called "field" audit because the agent will want to conduct the audit at your place of business rather than the IRS office.
Generally, any individual who is authorized to practice (a recognized representative) must be designated as the taxpayer's representative and file a written declaration with the IRS stating that he or she is authorized and qualified to represent a particular taxpayer. Form 2848, Power of Attorney and Declaration of Representative, can be used for this purpose.
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- So now, let’s see who can represent you before the IRS and to what extent.
Representation rights, also known as practice rights, fall into two categories:
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Unlimited Representation. Unlimited representation rights allow a credentialed tax practitioner to represent you before the IRS on any tax matter. This is true no matter who prepared your return. Credentialed tax professionals who have unlimited representation rights include:
- Attorneys. People with this credential are licensed by state courts, the District of Columbia or their designees, such as the state bar. Generally, they have earned a degree in law and passed a bar exam. Attorneys generally have on-going continuing education requirements and professional character standards. Attorneys may offer a range of services; some attorneys specialize in tax preparation and planning.
- Certified Public Accountants (CPA). Individuals with this credential are licensed by state boards of accountancy, the District of Columbia and U.S. territories, and have passed the Uniform CPA Examination. They have completed a study in accounting at a college or university and have also met experience and good character requirements established by their boards of accountancy. In addition, CPAs must comply with ethical requirements and complete specified levels of continuing education to maintain an active CPA license. CPAs may offer a range of services. Some CPAs specialize in tax preparation and planning.
- Enrolled Agents. People with this credential are licensed by the IRS. They are subject to a suitability check and must pass a three- part Special Enrollment Examination, which is a comprehensive exam that requires them to demonstrate proficiency in federal tax planning, individual and business tax return preparation and representation. They complete 72 hours of continuing education every three years.
- Enrolled Retirement Plan Agents (ERPA). People with this credential are licensed by the IRS and specifically trained in retirement plan matters. They can practice before the IRS on matters such as employee plan determination letters, the employee plans compliance resolution system, the employee plans master and prototype program and volume submitter program, and Form 5300 and Form 5500 tax returns.
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