Enrolled Agents Fight Minnesota Over Registration Statute

The National Association of Enrolled Agents (NAEA) has joined with the Minnesota Society of Enrolled Agents (MNSEA) to fight having Chapter 332B of the Minnesota Statutes, titled “Debt Settlement Services, apply to enrolled agents.” This statute would require any enrolled agent (“EA”) in the country representing even a single taxpayer based in Minnesota to comply with burdensome state registration requirements, pay a $1,000 initial registration fee and a $250 annual renewal fee.

The statute also requires an enrolled agent to incur the expense of posting a $5,000 security bond. Failure to comply subjects EAs to fines and penalties of up to $5,000 per incident, injunctions and civil damages.

“The reason this statute cannot stand is that enrolled agents hold a national credential that is not subject to conflicting or overlapping rules from state legislatures,” explained Twila Midwood, Chair of the NAEA Government Relations Committee. “EAs have passed a comprehensive exam administered by the IRS, are governed by Circular 230 of the IRS Code and must comply with federal continuing education requirements. States cannot interfere with a federal license—that’s a slippery slope!”

The statute also empowers the state Department of Commerce to set the level and means for payment of EA fees. For instance, the Debt Settlement Services Act does not allow for the payment of any upfront fees and forces the tax practitioner to list all provided services ahead of time before an EA is able to file a power of attorney in order to speak with the IRS or obtain a tax transcript. This substantially erodes the rights of EAs as established by federal law. Learn more about NAEA’s efforts by visiting the initiative webpage.

EAs are the only federally-licensed tax practitioners who both specialize in taxation and have unlimited rights to represent taxpayers before the Internal Revenue Service.