This is a very common question that I get from unenrolled preparers, particularly those from states like Oregon , California, Maryland, and New York that have their own state-level tax preparer licensing in place.
Short answer: Unequivocally YES, you need to be an EA, CPA, or attorney in order to represent taxpayers in IRS Collections.
In order to sign a Form 2848 and represent somebody in front of IRS Collections and/or Appeals, an individual must be an EA, CPA, or attorney. Under current IRS regulations, this is non-negotiable. The IRS does not recognize any of the state-level preparer licensing programs for representation purposes.
Connecting with an EA, CPA, or attorney is a great way to be engaged in this work, but the unenrolled preparerer is limited to the tax prep and bookkeeping in support of the case. We have plenty of preparers that attend our classes in order to better understand the process that they’re supporting when working with an EA/CPA/JD on IRS Collections representation cases. In fact, many CPAs and attorneys send their admin staff to our classes in order to learn how to work cases.
But never forget that the tax prep and bookkeeping is the lower dollar value work, compared to the actual representation component. It’s the most labor intensive component of tax debt resolution, but it’s the lowest value work for the client case.
I personally encourage all unenrolled preparers to simply go take the Special Enrollment Exam (SEE) to become an Enrolled Agent. Most preparers can pass Parts 1 and 3 with limited or even zero study, and Part 2 is passable by most folks with a few weeks of intense study. Becoming an EA literally doubles your earning potential overnight, plus it’s also a hedge against the inevitable passage of a bill by Congress to give IRS authority to regulate preparers. Become an EA now, and you’ll bypass any impact of future legislation in this arena.