Having the right credentials is more important than ever. The enrolled agent (EA) designation is the gold standard for tax professionals who want to confidently represent clients before the Internal Revenue Service (IRS) and enhance their careers by expanding their business services.

IRS enforcement trends: audits, liens and levies

The Inflation Reduction Act provided the IRS with funds to enhance its enforcement tools, using data analytics and artificial intelligence to identify discrepancies and potential fraud. These developments mean that more taxpayers, both individuals and businesses, could face audits, collection actions or legal proceedings, ultimately leading to a need for skilled representation. The IRS has increased their audits and examinations using a variety of methods, some are done automatically. For those that require representation, clients need the right advocate.

So, if a potential client gets a notice, will you be ready to help — or have to refer them elsewhere?

The changing IRS landscape: why representation skills matter

Unlike routine tax preparation, representation requires an in-depth knowledge of IRS procedures and the ability to communicate effectively with IRS agents. EAs can navigate these challenges and advocate on their client’s behalf by:

• Understanding the nuances of tax law
• Responding to IRS notice
• Negotiating settlements
• Defending taxpayers in audits or appeals
• Challenge incorrect assessments
• Review and correct missed deductions

Why the EA credential matters

One of the most significant advantages of becoming an enrolled agent is representing taxpayers before the IRS. If your client receives an IRS notice, you can explain what the notice means and craft a response for them within the required time constraints. If an audit is required, enrolled agents can assist their clients review, prepare and gather documents. Unlike uncredentialed tax preparers, who can only assist with tax returns, EAs have unlimited representation rights without restriction and can represent their clients in any state

Prospective EAs must pass a rigorous three-part exam covering individual and business tax law, representation and ethics before the IRS awards the designation. Unlike CPAs and attorneys who are licensed at the state level and may not always specialize in taxation, EAs focus exclusively on federal tax matters.

The bottom line

As the IRS continues to audit individuals and businesses, tax professionals must be prepared to offer more than just tax preparation services. Earning an EA designation can give tax professionals an additional edge in serving their clients. Level up today by learning how to become an EA with a NATP membership.

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Tax season does not have to be a stressful scramble at the last minute. Filing an extension gives you and your client extra breathing room by shifting some of the workload into a more manageable summer period. With an extension, individual clients have until Oct. 15, 2025, to file their 2024 Form 1040, U.S. Individual Income Tax Return. Any taxes owed still need to be paid by April 15, 2025, as it’s an extension to file, not an extension to pay. Note that some taxpayers may have different deadlines, especially if affected by disaster provisions.

Why consider an extension?

Clients might file an extension because it shifts the deadline to a slower period (for the preparer), allows them more time to gather documents, engage in detailed discussions about their tax situation and prepare thoroughly. This is all available without penalty, provided any taxes owed are paid by the original deadline.

For the preparer, an extension generally means an unhurried pace during the slower summer months, which translates into several benefits:

• Lower last-minute pressure: Both the preparer and their client’s experience are less stressful by avoiding a potentially rushed, last-minute filing
• Enhanced thoroughness: Extra time allows for a more careful review of the return, reducing the likelihood of oversights
• Improved client communication: With proactive planning and more opportunities for client interaction and discussion, practitioners can address questions and complex issues more effectively

A practical example

Consider the Meyer family, who experienced several financial changes during 2024. They:

• Purchased a new home
• Started a small home-based business
• Incurred unexpected medical expenses
• Purchased an electric vehicle
• Are planning on purchasing a used, clean vehicle in 2025 for their business

This hypothetical family illustrates why having extra time in the summer can be advantageous – it allows you to work with your clients through each change methodically.

Effective client engagement strategies

Getting clients to submit their tax documents during the summer can be challenging, but you can make it happen with a structured approach and consistent communication.

1. Emphasize the benefits of an extension

   a. Inform clients that summer is an ideal period for completing their return due to the slower pace during this season. Let them know there is no penalty for filing an extension, which gives them extra time to gather and review their documents and engage in discussions that might be difficult during the hectic tax season.

2. Use a timeline with due dates

   a. Provide a clear, step-by-step summer timeline. Break the process into manageable tasks with specific deadlines (e.g., submit all income documents by June 30). If necessary, provide reminders ahead of each deadline.

3. Leverage automation and technology

   a. Use secure online portals for document uploads. These portals are common with most tax preparation software. Automate client reminders, which may also be part of the tax preparation software package.

   b. Review Publication 4557, Safeguarding Taxpayer Data.

4. Offer incentives

   a. Consider implementing measures such as increasing fees for late documents to motivate timely compliance.

5. Make it easy for clients

   a. Provide a detailed checklist of required documents. Offer phone or video consultations and allow clients to submit documents in batches.

6. Follow up

   a. If deadlines are missed, send personalized reminders via email, text or phone call. Emphasize the benefits of providing documents and offer support to overcome any hurdles.

7. Create a sense of urgency

   a. Inform clients that your capacity is limited. To guarantee timely completion, documents must be submitted by a specific deadline (e.g., all documents due Aug. 1).

8. Address procrastination and anxiety

   a. Reassure clients who feel overwhelmed by the process. Offer quick introductory calls to help them start gathering their paperwork.

While an extension provides a welcome break, it’s important to remember that, as a tax practitioner, you can do only so much. Your ability to review and prepare returns effectively hinges on receiving complete and timely information from your clients. If documents are submitted late or incomplete, even the best-laid plans can fail, potentially leading to a late-filed return and additional complications.

So, while you’re prepared to offer support throughout the summer, the responsibility to provide necessary documentation in a timely manner ultimately lies with the client. Encourage clients to take advantage of this extended timeline to work frequently – keeping in mind that delays on their part can result in unintended consequences, such as a late-filed return.

By setting clear expectations, leveraging technology and maintaining proactive communication, you can create a relaxed yet efficient tax season that benefits you and your clients. Stay proactive, stay realistic and work together to make tax season as stress-free as possible.

Question: Victoria and Francisco have one son, Carlos, who is 18 and started his first year in college last fall. They provide over 50% of his support and will claim him as a dependent on their 2024 income tax return. They have never claimed education credits before and meet all the requirements to claim the American opportunity tax credit (AOTC) (e.g., have not been convicted of any felony drug offense, income requirements, etc.). [AOTC | Internal Revenue Service] Although Carlos received a partial scholarship to pursue an undergraduate degree in medicine, he still had eligible tuition expenses that his parents paid. Carlos does attend school full-time and does not work. Can Victoria and Francisco claim the AOTC?

Answer: Yes, Victoria and Francisco can claim the AOTC. Carlos is in his first year of college, they have never claimed the AOTC for him before and they meet all the other requirements. The maximum credit is up to $2,500.