Work not taxing for enrolled agents

Who said you had to be a CPA to take on the IRS?

Friday, Feb. 1, 2008

Click here to enlarge this photo Staff photo by GARY SMITH John Gregan, left, Tina Donaldson and Brien Gregan at their Smatax offices on Federal Square off of Leonardtown Road in Waldorf. E-Mail This Article | Print This Story

John Gregan has been working as an enrolled agent since he began his business, Smatax, from home in 1979. Now, his son has followed in his footsteps.

‘‘It was just kind of fate,” John Gregan said, who became an enrolled agent after one of his professors at St. Ambrose University in Iowa asked him to consider a career with the U.S. Internal Revenue Service, where he ended up spending many years.

‘‘I love it,” he said, and clients John has serviced for years now send their children to Brien to ‘‘interpret” jargon-riddled and ever-changing tax laws.

Bookkeeping? No thank you: While enrolled agent licenses are the oldest in the United States, many people don’t know much about them, John said.

‘‘People only want to talk about the profession during tax season,” Brien said jokingly.

Enrolled agents are licensed to practice by the federal government and can represent a client before any government agency by power of attorney. The enrolled agent profession dates back to 1884 when, after questionable claims had been presented for Civil War losses, Congress wanted to regulate those who represented citizens dealing with the U.S. Treasury Department.

An enrolled agent’s exam is 100 percent tax law questions, Brien said, which means enrolled agents deal only with taxation.

‘‘[Otherwise] it’s too much accounting. You’d spend your whole life accounting. A lot of accountants try to wear both hats. We’re more like lawyers than accountants,” John said.

But there are no billable hours and they don’t charge clients for asking extra questions that come up throughout the year, Brien said.

Enrolled agents must be licensed by the U.S. Treasury. John estimates there are about 40,000 enrolled agents in the country.

The job requires 72 hours of continuing education every three years and two hours of ethics training each year.

Fixing errors: Some of the time the Gregans are fixing self-prepared returns, but the partners have built a solid client base that relies on Brien and John to get their taxes done accurately the first time.

During the high tax season between January and April, the Gregans each work about 10 to 12 hours a day and on Saturdays because 80 percent of their work is done in those 10 weeks, John said. For that, the two attend ‘‘Gear up” seminars for tax professionals that help them get ready for the rush.

‘‘At first I thought we were getting stepped on, but [now] I see that most businesses are seasonal,” John Gregan said.

Adjusting to new laws, economy: Since the terrorist attacks of Sept. 11, 2001, there have been a lot of tax law changes as well as more preparer regulations, which has kept the Gregans on their toes, Brien said.

‘‘We have to be 51 percent sure that our position is correct or we get penalized. Preparers have to be on the ball,” Brien said.

‘‘They’re [IRS] scrutinizing returns more than they ever have,” John said. And because of the current, ‘‘hard” economy that affects more middle and lower class people, the Gregans say they’re having one of their busiest years.

‘‘I think they’re being forced to look at how they’re spending their dollars,” Brien said.

‘‘Taxes are the largest expenditure in your life,” John said. ‘‘It’s what’s not [already] on the return that makes a difference.”

Despite the economy’s rough state, ‘‘there’s a lot of entreprenuership going on,” John said.

Many new, small businesses come to the Gregans for help because returns for the self-employed are difficult, and this keeps their job interesting, John said.

‘‘I’m in my 38th year, and I’m still learning something new every day. There are surprises every day,” John said.

Learning about people’s lives: ‘‘You get to know people in this business. You learn a lot about people and their lives,” John said.

Sometimes this can mean getting people more money back from Uncle Sam. One of the more interesting memories John has was helping a client save about $300,000 over the last 20 years in windfall profit taxes on an oil well he inherited after his personal assistant leaked to John over lunch that the man was half Native American. ‘‘It pays to gripe in the right spots. You always have to listen to what people have to say,” John said.

The amount of overpaid taxes across the board is ‘‘phenomenal,” John said, and they hope to find where clients can maximize their returns.

But their job is easier and more enjoyable when they can maintain lasting relationships with their clients, the Gregans said.‘‘It’s a once-a-year thing. And if you see them more than once it’s a plus,” Brien, who takes time to visit clients who live as far away as North Carolina while on vacation, said.

Kayleigh Kulp

Got an idea for someone to profile in On the job? Send your suggestions to Kayleigh Kulp at kkulp@somdnews.com or 7 Industrial Park Drive, Waldorf, MD 20602. Call 301-764-2851.