Why Status 332B Regulating Debut Settlement Services Must Be Overturned
- NAEA is fighting to protect and defend the livelihood and rights of enrolled agents to provide services to taxpayers wherever they may be located, within or outside the United States.
- All enrolled agents throughout the country should be concerned about this state encroachment on the authority of the federal government to regulate enrolled agents.
- We are seeing a trend at the state level to shut down the “Offer Mill” firms (those companies advertising late at night that they will negotiate “pennies on the dollar” for taxpayers owing the IRS) that are charging high fees, not delivering for taxpayers, and seemingly not using Circular 230 tax practitioners to decide the appropriateness of promised services or provide those services. Enrolled agents, unfortunately, are being caught up in these efforts.
- Enrolled agents are licensed by the U.S. Department of the Treasury. The enrolled agent credential is a national credential, NOT a state credential subject to the whims and conflicting or overlapping rules from state legislatures.
- Enrolled agents must pass a comprehensive exam administered by IRS, are governed by Circular 230 of the IRS Code and must comply with federal continuing education requirements.
- The Minnesota law requires any enrolled agent in the country representing even a single taxpayer in Minnesota to register and pay a $1,000 initial registration fee, a $250 annual fee, and the imposes expense of posting a $5,000 security bond and possible injunctions and civil damages. Failure to comply subjects enrolled agents to fines and penalties of up to $5,000 per incident, injunctions and civil damages.
- Minnesota Statute 332B places significant financial burdens on enrolled agents representing clients living in the state. State fees and registration requirements are clearly not what IRS had in mind for its highest credential.
- Not only does the state law interfere with the ability of any enrolled agent representing a Minnesota resident, it is likely to become a model for other states to dabble in regulating a federally issued license over which they have no legal authority.
- If Minnesota Debt Settlement Services Statute 332B is not changed, we will see similar laws passed in multiple states.
- Minnesota Statute 332B empowers the Minnesota State Department of Commerce to set the level and means for payment of enrolled agent fees. For example, the statute does not allow for the payment of an upfront fee and forces the tax practitioner to list all provided services ahead of time before an enrolled agent is able to file a power of attorney in order to speak to the IRS or obtain a tax transcript.
- Minnesota Statute 332B requires enrolled agents to provide the Minnesota State Department of Commerce with detailed taxpayer information, contrary to Circular 230 and the Internal Revenue Code.
- NAEA has your back and is vigilantly protecting the rights of members and non-member enrolled agents’ practice rights.
- NAEA is the “Go To” organization for the enrolled agent community. We are dedicated to protecting your right to practice.
- Be a champion for enrolled agents everywhere. Partner with us today to protect and defend the nationwide scope of enrolled agents’ practice rights.
