Is Tax Preparation an Essential Business?

Written by Joyce Cheng, EA

Many members have contacted CSEA about whether or not Enrolled Agents with offices and staff are considered an essential business and therefore allowed to be open for business during the current COVID-19 crisis. CSEA has contacted the IRS Stakeholder Liaison, Franchise Tax Board and the Cybersecurity and Infrastructure Security Agency (CISA) in an attempt to get a definitive answer. To date, we do not have an absolute written declaration from competent authority. However, CSEA will continue its efforts to get clarity on this issue.

What we do know is that the federal list of essential business is promulgated by CISA. There is additional information here. Keep in mind that according to CISA Director Christopher Krebs, this list is not a mandate and is not all-inclusive. It is up to the individual states to issue their own protocols for essential business/workforce. In California, individual counties are also setting local restrictions that may be more restrictive than the state’s guidance.

CISA's guidance under “Financial Services” seems to have several descriptions that could apply to Enrolled Agents and tax preparation:

  • Workers who are needed to provide, process and maintain systems for processing, verification, and recording of financial transactions and services, including payment, clearing, and settlement; wholesale funding; insurance services; consumer and commercial lending; and capital markets activities).
  • Workers who are needed to maintain orderly market operations to ensure the continuity of financial transactions and services.
  • Workers who are needed to provide business, commercial, and consumer access to bank and non-bank financial services and lending services, including ATMs, lending and money transmission, and to move currency, checks, securities, and payments (e.g., armored cash carriers).
  • Workers who support financial operations and those staffing call centers, such as those staffing data and security operations centers, managing physical security, or providing accounting services.
  • Workers supporting production and distribution of debit and credit cards.
  • Workers providing electronic point of sale support personnel for essential businesses and workers.

CSEA believes that tax preparation falls under this category.

On March 19, Governor Newsom’s office issued a “stay home order” and related guidance, which included a list of exempt sectors. Under “Other Community-Based Government Operations and Essential Functions,” it includes:

"Professional services, such as legal or accounting services, when necessary to assist in compliance with legally mandated activities and critical sector services."

CSEA also believes that tax preparation falls under this category. Clearly, we can use common sense to come to the conclusion that tax preparation is an essential business. We provide compliance with legally mandated activities. We are in the category of law enforcement when you consider that we assist taxpayers in complying with tax laws.

IRS Commissioner Charles Rettig has stated IRS is open to maintain mission-critical functions: processing returns and refunds. Enrolled Agents who prepare returns are a huge cog in the wheel of IRS’ mission-critical functions. Despite any extensions to file, returns are required. We also have work to do getting information out to our clients regarding the new rules implemented, resources available, relief programs, as well as helping our clients navigate this crisis. So, are Enrolled Agents and tax preparation an essential business? We think so!