There is currently a bill making its way though the US House of Representatives and US Senate that would require all persons that prepare a US tax return to pass a competency exam. However currently there is no such requirement. Anyone can legally prepare your tax return. This includes you, your family, your friends, your neighbor, former IRS employees, a contractor residing in India, criminals, and cheats. You must decide what qualifications your tax professional should have. Should he\she:

• Be licensed by the IRS?
• Be able to represent you before the IRS without requiring your presence?
• Have passed a compentancy exam to demonstrate proficiency in taxation
• Be required to continue learning?
• have experience with similar situations like yours?
• Be someone you trust and feel comfortable with?
• Be a true professional and represent them as such?
• Sign, date, and include PTIN (or SSN) [NOTE: this is required]

Most EA's possess all these qualities.

Below are the type of services a competent enrolled agent can perform.

• Return preparation - federal and state
• Bookkeeping
• Payroll
• Business start-up and entity selection
• Accounting
• Consulting and tax planning
• Representation - including Offer-in-compromise, audits, appeals, and collections