Enrolled Agents Support Proposal

January 5, 2007—The Internal Revenue Service Advisory Committee on Tax Exempt and Government Entities (ACT) has proposed a new licensing system for retirement plan specialists. The creation of this credential, enrolled retirement plan agent (ERPA), would establish a new category of licensed professionals who may represent employers before the IRS on retirement plan matters.

“Given that pension plan specialists represent clients before IRS, the enrolled retirement plan agent makes sense intuitively. Those who represent taxpayers before IRS should be licensed, in order to protect both the taxpayer and the tax system,” says Robert Kerr, senior director of government relations for the National Association of Enrolled Agents (NAEA). “When IRS licenses individuals, it requires them to demonstrate competency and holds the licensed professionals to a higher standard. As is the case with enrolled agents, ERPAs would have to pass an initial examination, fulfill continuing education requirements, and would be subject to a license renewal process.”

The ERPA license would be limited to practice in the areas of plan termination, employee plan audits, representing qualified retirement plans in IRS audits, filing forms used for annual reporting of employee benefit plans (IRS Forms 5500), and filing requests for initial determination letters.

“Establishing and regulating the ERPA credential will in many cases raise the overall quality of service companies receive from retirement plan specialists,” adds Kerr.

Currently, there are four practitioner categories that may practice before the IRS: enrolled agents, certified public accountants, attorneys and enrolled actuaries. The term “enrolled,” which is misunderstood by many in this context, means licensed to practice before the IRS and “agent” refers to being authorized to appear in place of a client before that agency. 

ACT has recommended a target date of October 2007 for the beginning of the ERPA enrollment process. Candidates would be tested on their knowledge of all types of retirement plans including defined contribution, defined benefit, and employee stock ownership plans. The American Society of Pension Professionals and Actuaries (ASPPA) and the National Institute of Pension Administrators (NIPA) have both come out strongly in support of the establishment of this program under IRS Circular 230.

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