IRS Enrolled Agent Part 3 Representation Practice and Procedures

Candidates must have a thorough command of the IRS collection process, including: the Notice of Federal Tax Lien and its effects; Levy procedures and exemptions (e.g., wage, bank, and property levies); Installment Agreements (including streamlined, partial pay, and guaranteed agreements); Offers in Compromise (doubt as to liability, collectibility, and effective tax administration); Currently Not Collectible status; and the Collection Due Process (CDP) and Equivalent Hearing appeal rights. Understanding the sequence of collection actions and the taxpayer's options at each stage is paramount.

Treasury Department Circular 230 establishes the regulations for practicing before the IRS. For the exam, you must know its rules on: Standards for tax returns and advice (including the realistic possibility and non-frivolous positions standards); Requirements for due diligence and client confidentiality; Guidelines for advertising and solicitation; Procedures for powers of attorney and third-party authorizations; and the disciplinary proceedings for incompetent, disreputable, or unethical conduct. Compliance with Circular 230 is mandatory for maintaining your EA status and practicing ethically.

An Office Audit is typically conducted by mail or at an IRS office for less complex issues with limited scope (e.g., substantiating specific deductions). A Field Audit is more comprehensive, conducted at the taxpayer's place of business or representative's office, and involves broader examination of books and records. The distinction matters for representation strategy: preparation, documentation requirements, and negotiation dynamics differ significantly. Understanding the audit type informs how you advise your client on preparation, what authority level the revenue agent possesses, and the appropriate protocols for communication and resolution.

No, Enrolled Agents cannot represent clients in U.S. Tax Court, which is a judicial court. The EA's unlimited representation rights extend to all *administrative* levels of the IRS, including examinations, collections, and appeals. Once a case petitions to the U.S. Tax Court, representation must be handled by an attorney admitted to practice before that court. However, an EA plays a crucial role in the pre-trial administrative process, which can often resolve the case without needing to go to court.

The IRS codifies ten fundamental rights. For representation, key rights include: The Right to Retain Representation (assisted by an EA, CPA, or attorney); The Right to Confidentiality; The Right to Appeal an IRS Decision in an Independent Forum; The Right to Finality (knowing timelines); The Right to be Informed; The Right to Quality Service; and The Right to a Fair and Just Tax System. Your role as an EA is to ensure these rights are protected throughout the examination, collection, and appeal processes.