Wanted to bring up Enrolled Agents. From the NAEA's website:
An Enrolled Agent (EA) is a federally-authorized tax practitioner who has technical expertise in the field of taxation and who is empowered by the U.S. Department of the Treasury to represent taxpayers before all administrative levels of the Internal Revenue Service for audits, collections, and appeals.
Around 2002, my wife and I began to worry about IRS audits.
We had began to try to educate ourselves on tax issues and in the process found a few worrisome issues. In putting together that year's taxes I found a few discrepancies in an old filing and requested a W-2 from an agency I worked with in the late nineties. They weren't able to produce this (they had been playing games with the books). Also, around that time my wife was doing freelance editing work with an individual who wasn't all that .... umm ... meticulous with his paperwork.
This was missed and/or not brought up by the various tax preparation agencies we used in the past.
So, we tried a CPA.... after not communicating for several months nor giving updates as to work done, we dropped him.
As our stress increased, we came across info on Enrolled Agents. From the NAEA's site we went to their "find an agent" link and found our "Tax Lady".
She went through six years of returns and amended them. Only one year did we pay out ... and that was state taxes.
She was able to work up significant returns over her rate for the five years of returns she amended.
So, in summary:
1) Yes, you will pay more up front for an EA. But, in my experience, your return will be greater.
2) For an EA to keep their license, they have to re-qualify every three years. Of note: the NAEA has additional professional education requirements for its members.
3) They are "authorized to appear in the place of the taxpayer at the IRS".
