WASHINGTON, D.C. (June 18, 2008)—Two tax challenges facing small businesses—reasonable compensation and recordkeeping—were the central focus of testimony presented by the National Association of Enrolled Agents (NAEA) before the House Small Business Committee subcommittee of finance and tax.

The hearings, which centered on the need for IRS to clarify and simplify rules governing small business as they relate to S-corporations, sought to bring special attention to business growth and development. Enrolled agents, who prepare taxes for individuals and businesses, see more of those businesses where gross annual receipts measure in the tens of thousands not tens of millions of dollars.

Citing provisions of HR 5716, The Taxpayer Bill of Rights Act of 2008, which was introduced by Rep. Xavier Becerra (D-CA) in April, Robert A. Kerr, NAEA’s Senior Director of Government Relations, called attention to the need for greater competency among tax practitioners. “We believe that greater competency leads to better advice and better compliance.” Mr. Kerr continued, “For its part, IRS has in recent years made decided efforts to educate small business and should be supported and encouraged as it moves forward and as it continues to balance its compliance obligations with its assistance obligations.”
Enrolled agents provide tax preparation, representation, tax planning and other financial services to millions of individual and business taxpayers. They are the only federally licensed tax specialists. EAs adhere to a code of ethics and professional conduct, and they are required by IRS to pursue Continuing Professional Education.
The Enrolled Agent license was created in 1884 by the U. S. Department of the Treasury, and only EAs are tested by IRS on their knowledge of tax law and regulations.