Enrolled Agent's Accounting Services Taxable in West Virginia

Thursday, September 11th, 2014

A CPA doing taxes.
West Virginia

The West Virginia Office of Tax Appeals recently released a decision that an enrolled agent's accounting services were not exempt professional services.

An enrolled agent performed accounting services for a company. An enrolled agent is a person who is accredited to represent taxpayers before the Internal Revenue Service (IRS). The services this enrolled agent provided included reviewing monthly bookkeeping entries, reconciling company bank statements, preparing and submitting monthly balance sheets and profit/loss statements, preparing required reports for federal and state taxes, providing tax and accounting advice to management and bookkeepers, maintaining employee records in payroll software, and representing the company at West Virginia audits. They did not include representing the company before the IRS.

West Virginia exempts sales of professional services. A "professional service" is an activity that is (1) recognized as professional under common law or (2) determined by the state Tax Department or the legislature to be professional. In a regulation, the Tax Department included enrolled agents in a list of groups that provide professional services. When a professional performs non-professional services, the non-professional services are still taxable.

The Office of Tax Appeals determined that the enrolled agent's services were taxable. Accounting services were not professional services when performed by the enrolled agent rather than a certified professional accountant. The enrolled agent's professional services consisted of representing taxpayers before the IRS, not accounting. The enrolled agent therefore did not perform professional services when performing accounting services. Because the enrolled agent only provided accounting services here, the services were taxable.


About TTR

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TTR has a website that companies subscribe to and use daily. This website provides a list of everything that can be bought or sold in the U.S. It provides simple answers to whether buying or selling these items is taxable (subject to a sales tax or other tax), and it provides all the legal authority to support these tax answers.

TTR likes to keep things simple and fun, which is why it has great people who provide help to clients on any support questions they have about transaction tax issues.

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