Why EAs (Enrolled Agents) Should Be Asking Questions

TaxMama’s ® favorite pastime happens to be answering tax questions in my TaxQuips Forum. I look forward to the challenges and learn so much from the questions. And when I am wrong, which does happen (who knows the entire Tax Code, after all?), I learn even more! Let me tell you, some of my graduates know much more than I do in certain areas of taxation so I learn from them.

So why are we talking about this today?

Because a great many of the questions that come in show one of three things:

A total laziness in looking things up for themselves
A complete lack of awareness of the tax reference tools available to tax professionals and the public.
Or just a flat-out lack of familiarity with the laws and updates.

All of these are frightening thoughts.

You’ve got to stay up to date!

Let’s start with the last topic first. Not keeping up with changes. While all tax, accounting and legal professions require annual continuing education not all licenses require any updates in taxation at all. So, not everyone bothers to take tax update courses. Or folks blow through some 4-hour online self-study thing in a half hour, without really learning the updates. But they do pass the mini exams the courses provide. (Guilty! I’ve done it myself from time-to-time.)

I miss the old days when the tax software company (generally an out-house processing company like CCH Computax, Unitax, Dynatax, etc.) would hold their annual workshops. Not only would you sit there for 8 hours learning how to input data into their forms; they would also teach you the relevant updates to the tax laws. Often, the sessions were free and provided CE credits so firms would send all their tax staff.

Today, we buy the tax software and use it in-house. The developers are providing video mini-courses showing how to use various parts of their software. But few companies are still providing in-person workshops. I think only Drake does much of that anymor

Where to start looking

Moving on to issue number 2 no clue where to start looking. This is a result of the fact that, in the United States of America, there is no minimum standard for licensing a tax professional in 47 out of 50 states. (California, Oregon and Maryland are exceptions. Although NY expects you to register they have no standards). So, in 47 states, you don’t need a high-school education; to speak English; to know where the tax laws are located; to know how to read or write…or anything. Anyone can open up a tax preparation office and get paid to do tax returns and they do. These are your competitors. (True, there are many well-trained and educated folks in those states, as well. You will find that they have joined NAEA, NATP and other accounting and tax societies to stay up to date.)

So, with no training, no fundamental tax education, these people don’t even know where to start researching their tax questions. They’ve never even read Pub 17.

What to be looking at!

Speaking of Pub 17, we get to – knowing where to look the 1st issue. If nothing else, at the very least, DO read Publication 17 or have all your new staff read it. (Note: it’s much easier to read than the Prentice Hall or CCH Tax Course provided in college. I used to keep falling asleep reading those books people had to nudge me awake every half hour or so.) Pub 17 contains all the fundamental information related to preparing a personal tax return. It even has examples, worksheets, tax tables.

Of course, it is nice to actually go to the source ever hear of the Internal Revenue Code? It’s online. For free. Really. The most recently updated version is the one at Cornell Unversity. Remember to donate some money to them once in a while to help keep the resource current.

There are a bunch of other common research tools that I use all the time along with some worksheets and other resources. You can find them in TaxMama’s® free resources. And really, when you need to find an answer to just about anything try Googling the topic. You’d be amazed how much good, relevant information you can find, including in-depth articles, court cases, and more.

But if you really, truly want to know more about how to do tax research, how to prepare tax returns properly (personal, business, trust, etc.), how to help clients pay pennies on the dollar when they owe money to the IRS and more then you MUST take TaxMama’s® EA Exam Review Course starting very, very soon.

Image Credit: Note to self: Google FIRST. Ask questions here later . . .Cheryl on Flickr.