Nearly 100 Enrolled Agents from almost 40 states met with lawmakers on Capitol Hill this week to discuss important issues affecting taxpayers as part of the ninth annual Fly-in Day organized by the National Association of Enrolled Agents (NAEA). NAEA is a non-profit membership organization for Enrolled Agents. Enrolled Agents, or EAs, hold a federal license from the Department of Treasury and may represent taxpayers before the IRS in addition to tax planning and preparation. Enrolled Agents are the only federally-licensed tax practitioners who both specialize in taxation and have unlimited rights to represent taxpayers before the Internal Revenue Service (IRS).
The goal of the Fly-in Day was to give Enrolled Agents the opportunity to make their voices heard on three important issues: tax reform, the IRS Future State vision, and establishing minimum standards for return preparers.
Tax reform talks, of course, are timely given commitments by Congress and President Trump to push new measures through by year-end. There is no fixed proposal on the floor of Congress but the President has made public his blueprint for tax reform. Trump has suggested that the specifics under the plan are up for negotiation, saying, “Everything’s a starting point.”
(You can read about some of the potential winners and losers under the President’s tax plan here.)
The IRS Future State (don’t get me started on the name) is an IRS initiative geared towards improving tax processing systems, increasing electronic filing and payment options, and expanding services available on IRS.gov for taxpayers and tax professionals. NAEA members want to ensure the IRS modernization efforts include the creation of online accounts for qualified tax professionals with real-time electronic signatures capability to facilitate direct communication with IRS personnel and streamline the electronic filing process. “While I admire IRS efforts to build a responsive 21st-century tax administration system, those efforts must incorporate the needs of both taxpayers and tax professionals,” observed NAEA Associate Director of Government Relations Justin Edwards.
(For more on the initiative, click here.)
For the last few years, the IRS has pressed the issue of licensing tax return preparers. Those efforts were shot down in Loving v. Commissioner when a federal judge ruled that IRS didn’t have the right to regulate tax preparers without Congressional approval. Loving was filed in 2012 by three independent tax preparers: Sabina Loving, John Gambino, and Elmer Kilian. The three accused the IRS, among other things, of lacking the authority to license tax preparers. It turns out, the court agreed. The IRS appealed but lost again at the appellate court level. The IRS eventually gave up on appeals and moved to a voluntary program instead. At the time, IRS Commissioner Koskinen referred to the program as “not the ideal solution” and noted that it would be easier if Congress simply stepped in and granted IRS the authority that the courts found lacking. Congress considered such legislation in 2015 but ultimately did move on the issue.
“Your barber or hairstylist is required to pass a licensing exam yet the person you hire to prepare your tax return is under no legal obligation at present, to demonstrate even basic proficiency,” said NAEA Executive Vice President Cedric Calhoun, FASAE, CAE. “Unlike other tax preparers, enrolled agents must pass a stringent licensing exam to demonstrate their
competence in all areas of taxation, representation, and ethics and maintain their knowledge through continuing education.”
NAEA members met with state representatives and senators, as well as members of tax-writing committees, before ending the day with a celebratory reception featuring Rep. Terri Sewell (D-AL) from the House Committee on Ways and Means. Kerry Freeman, an NAEA member and current President of Phoenix West Chapter of NAEA, said the event was well-received, noting, “We appreciate our senators and congressmen allow us time to share the taxpayers’ concerns.”