What Does an Enrolled Agent Do When You Owe the IRS?

If you owe the IRS, you may be wondering who can actually help you deal with the situation. Maybe you've received several IRS notices, your balance keeps growing, or you're worried about a possible bank levy or wage garnishment.

You may have heard of an Enrolled Agent, or EA, but aren't sure what that means or how one can help.

An Enrolled Agent is a federally licensed tax professional authorized to represent taxpayers before the Internal Revenue Service. When you owe back taxes, an EA can help you understand your tax situation, communicate with the IRS, and evaluate possible ways to address your tax debt.

But there's more to it than simply calling the IRS on your behalf.

Let's look at what an Enrolled Agent actually does when you owe the IRS and how working with one may help you move forward.

What Is an Enrolled Agent?

An Enrolled Agent is a tax professional licensed by the U.S. Department of the Treasury to represent taxpayers before the IRS.

Unlike some tax professionals whose representation rights may be limited, an EA has unlimited practice rights before the IRS. This means an EA can represent individuals and businesses in matters involving tax returns, examinations, collections, and appeals, subject to applicable requirements.

To become an Enrolled Agent, a person must either pass the IRS Special Enrollment Examination or qualify through certain IRS employment experience. EAs must also meet continuing education requirements and maintain their professional standing.

An EA is not just someone who prepares tax returns. Enrolled Agents can also help taxpayers deal with complicated IRS problems, including unpaid taxes, unfiled returns, collection actions, and disputes with the IRS.

What Does an Enrolled Agent Do If You Owe the IRS?

When someone comes to me because they owe the IRS, the first thing I want to understand is how they got into that situation.

Not every tax debt is the same. One person may owe because they haven't filed tax returns in several years. Another may have filed everything but experienced a financial hardship that made it impossible to pay. Someone else may have received an unexpected tax bill after an IRS adjustment.

The right approach depends on the circumstances.

Here are some of the ways an Enrolled Agent can help.

1. Review Your IRS Tax Account

Before discussing a resolution, it's important to understand exactly what you're dealing with.

An Enrolled Agent can obtain authorized access to your IRS account information and review available tax transcripts.

This can help identify:

• Which tax years have outstanding balances.

• Whether required tax returns are missing.

• How much the IRS says you owe.

• Whether penalties and interest have been added.

• Whether the IRS has recorded a tax lien.

• Whether collection activity has started.

• Whether there are previous agreements or actions affecting the account.

Sometimes the amount a taxpayer believes they owe isn't the full picture. There may be missing returns, adjustments, payments that need to be reviewed, or other issues that should be addressed first.

Understanding the account is an important first step.

2. Communicate With the IRS on Your Behalf

Dealing with the IRS can be frustrating, especially when you're already worried about money.

You may not know which department to contact, what information to provide, or how to respond to a particular notice.

With proper authorization, an Enrolled Agent can communicate with the IRS on your behalf.

This may include:

• Requesting account information.

• Discussing outstanding tax balances.

• Following up on pending matters.

• Responding to certain IRS notices.

• Discussing collection alternatives.

• Addressing questions about your tax account.

An EA can also help explain what the IRS is asking for and what steps may be necessary to move your case forward.

This doesn't mean the IRS will automatically stop collection activity just because you've hired a professional. Any collection protections depend on the specific circumstances and the actions taken by the IRS.

3. Help You Get Caught Up on Unfiled Tax Returns

One issue I see with taxpayers who owe the IRS is that the problem isn't limited to the balance due.

Some people haven't filed tax returns for several years. Others stopped filing because they couldn't afford to pay what they expected to owe.

Unfortunately, avoiding the tax returns doesn't make the problem go away.

An Enrolled Agent can help identify missing tax returns, determine what needs to be filed, and work with you to get your filing situation back in order.

This is important because the IRS generally expects taxpayers to meet their filing obligations before considering certain collection alternatives.

If the IRS has prepared a Substitute for Return (SFR), an EA can also help review the situation and determine whether filing an accurate original return may be appropriate.

Getting your tax filings current is often an important part of addressing an IRS balance.

4. Evaluate Your Tax Resolution Options

This is where tax resolution becomes especially important.

There isn't one solution that works for everyone who owes the IRS. An Enrolled Agent can review your financial situation and help determine which options may be appropriate.

Depending on your circumstances, those options may include:

Installment Agreement

An installment agreement allows you to pay your tax debt over time through an approved payment arrangement with the IRS.

The amount you owe, your financial circumstances, and the type of agreement available can affect the terms.

Offer in Compromise

An Offer in Compromise may allow certain taxpayers to settle their federal tax debt for less than the full amount owed.

However, not everyone qualifies. The IRS generally evaluates your ability to pay, income, expenses, asset equity, and other relevant circumstances.

An Offer in Compromise should be evaluated carefully before deciding whether to pursue one.

Currently Not Collectible (CNC) Status

If you cannot afford to pay your tax debt without being unable to meet necessary living expenses, you may qualify for Currently Not Collectible status.

If approved, the IRS temporarily suspends certain collection efforts.

However, the debt does not disappear. Interest and penalties generally continue to accrue, and the IRS may review your financial situation again.

Penalty Abatement

In some situations, taxpayers may qualify to have certain penalties removed.

Depending on the circumstances, relief may be available through First Time Abate or reasonable cause.

An Enrolled Agent can review your account and determine whether requesting penalty relief makes sense.

The important thing is to look at the entire situation before choosing a resolution strategy.

5. Help Address IRS Collection Actions

If you've ignored IRS notices or haven't been able to resolve your tax debt, the situation may eventually move into collections.

Depending on the circumstances, the IRS may take collection actions such as:

• Filing a Notice of Federal Tax Lien.

• Issuing a levy against your bank account.

• Garnishing your wages.

• Taking other collection actions permitted by law.

An Enrolled Agent can review the status of your account, explain what the IRS has done, and help evaluate available ways to address the collection activity.

Timing matters here.

For example, certain IRS notices provide specific deadlines for requesting a hearing or exercising appeal rights. Waiting too long can affect the options available to you.

If you've received a notice warning about a levy, don't put it aside. Have it reviewed so you understand what it means and what deadlines apply.

When Should You Consider Hiring an Enrolled Agent?

You don't necessarily need professional representation every time you receive an IRS notice.

However, there are situations where getting help can make a meaningful difference.

Consider speaking with an Enrolled Agent if:

• You owe the IRS more than you can afford to pay.

• You have several years of unfiled tax returns.

• You've received notices warning about collection action.

• Your wages are being garnished.

• The IRS has levied your bank account.

• You have an outstanding federal tax lien.

• You're having trouble communicating with the IRS.

• You're unsure which tax resolution option makes sense for your situation.

The earlier you understand what's happening, the more time you may have to evaluate your options.

What Is the Difference Between an Enrolled Agent and a Tax Preparer?

This is a common question.

A tax preparer generally helps individuals and businesses prepare and file tax returns. Some tax preparers also have professional credentials that allow them to represent taxpayers before the IRS.

An Enrolled Agent has specific federal authorization to represent taxpayers before the IRS in tax matters.

That distinction is important when you're dealing with back taxes, IRS collections, examinations, or appeals.

Not every tax preparer specializes in tax resolution. If you're dealing with an IRS balance or collection problem, look for someone with experience handling those types of cases.

How Does Working With an Enrolled Agent at Lucha Tax Solutions Work?

At Lucha Tax Solutions, my focus is helping individuals and businesses understand and address their tax problems.

I'm Benito Gonzalez, EA, and I work with taxpayers dealing with IRS tax debt, unfiled returns, collection notices, and other tax-resolution matters.

When someone reaches out, I want to understand what's going on before recommending a direction.

That means looking at the tax years involved, reviewing the IRS account, understanding the taxpayer's financial circumstances, and identifying what options may be available.

Sometimes the next step is getting missing returns filed. Other times, it may involve evaluating an installment agreement, an Offer in Compromise, penalty relief, or Currently Not Collectible status.

There isn't a one-size-fits-all answer.

My goal is to help you understand where you stand, what the IRS is doing, and what steps may be available to address the problem.

You Don't Have to Figure Out Your IRS Tax Debt Alone

Owing the IRS can be stressful. You may be worried about how much you owe, what the IRS might do next, or whether you'll ever get the situation under control.

But ignoring the problem usually doesn't make it easier.

An Enrolled Agent can help you understand your tax account, communicate with the IRS, and evaluate possible ways to address your tax debt.

If you owe the IRS and aren't sure what to do next, let's talk.

At Lucha Tax Solutions, I help taxpayers understand their options and work toward resolving their IRS tax problems.

Visit Lucha Tax Solutions to learn more or schedule a consultation.