The Enrolled Agent Exam (also called the Special Enrollment Exam or SEE) is the first step you need to take to become a tax professional able to represent clients before the IRS. Becoming an EA is not a walk in the park, but by knowing a little more about the exam, you’ll be prepared for your new career. Whether you’ve decided to take the SEE or you’re comparing becoming an Enrolled Agent to other professional options, here’s what you need to know about the EA Exam.
1. It’s Relatively Cheap
According to the IRS Website, the cost of each part of the exam is $181.94, which is paid when you schedule your appointment, for a total cost of $545.82. Compared to other accounting related credentials which cost around $1,000 just for the exam, the SEE fees are mild.
2. There’s a Specific Testing Window
The EA Exam testing window is from May of Year 1 into February of Year 2. March and April are “dark months” because it’s peak tax season.
3. The Enrolled Agent Exam Covers A Lot
It sounds cliché to say an exam covers a vast amount of information, but the EA exam digs into taxes on a number of levels, which means the amount of information you need to know seems endless. This is for good reason: tax professionals who represent clients before the IRS need to know how to adequately and legally defend their clients based on current tax law.
The exam has three parts which have to be completed within a two-year period. Let’s break them down into their respective sections:
- Part One: Individuals – 100 Questions, 3.5 Hours
- Preliminary Work and Taxpayer Data – 17 Questions
- Income and Assets – 21 Questions
- Deductions and Credits – 21 Questions
- Taxation and Advice – 14 Questions
- Specialized Returns for Individuals – 12 Questions
- Part Two: Businesses – 100 Questions, 3.5 Hours
- Business Entities – 28 Questions
- Business Financial Information – 39 Questions
- Specialized Returns and Taxpayers – 18 Questions
- Part Three: Representation, Practices and Procedures – 100 Questions, 3.5 Hours
- Practices and Procedures – 25 Questions
- Representation Before the IRS – 24 Questions
- Specific Types of Representation – 19 Questions
- Completion of the Filing Process – 17 Questions
4. Study Materials Definitely Will Help You Pass
All of the information about the EA Exam is public on the IRS website. But, there isn’t a guidebook on how to navigate everything. You are free to dig through the entire Internal Revenue Code, Treasury Department Circular 230, IRS Publications and IRS tax forms.
To save a lot of time and unnecessary work, you can invest in different study materials specifically geared toward passing the EA Exam. There are traditional book models and individualized adaptive learning models available, such as Surgent EA Review.
4. Not All the Questions Count
There are 100 questions on each exam, but only 85 of them count toward your score. 15 are experimental questions distributed within your exam and indistinguishable from scored questions. The IRS adds these questions to current exams to see if they would be a good fit as actual scored questions in the future.
6. The Exam Changes Every Year
The tax landscape changes every year, and the exam rises to meet that change. Be sure to consult the IRS website to see which topics will be tested, and which tax year your exam pertains to. For example, exams taken between May 1, 2018 and February 28th, 2019 are based on the Internal Revenue Code as of December 31st, 2017 are based on the Internal Revenue Code as of December 31st, 2017.
If you decide to purchase study materials, make sure you go with a company that updates their study materials based on updates to the topics specification list. You don’t want to purchase materials only to find out they’ll be out of date by the time you take your exam.
7. Pass Rates Fluctuate Based on the Exam
Prometric, the company administering the exam, reports exam results and has them publicly available on their website. These reports show the last three testing window’s worth of passing data. Passing rates for the May 2017 through February 2018 window are shown below:
Part 1: Average of 61%
Part 2: Average of 64%
Part 3: Average of 85%
As you can see, the pass rates for Part 3 are much higher than for Parts 1 and 2. The exam parts can be taken in any order, so you may choose to save the easier exam for last, or get it out of the way first to enjoy a confidence boost.
8. There’s a Specific Way to Sign Up and Take the Exam
Here are the specific steps you need to take when you’re ready to sign up for your exam:
- Go to Prometric’s website and create an account
- Review the Candidate Information Bulletin telling you about the exam
- Schedule your exam by logging into your account and selecting “Schedule Now”
- Select your Test Center, Date and Time and Pay for your exam
- Study, study, study and get ready to take your exam on the specified date
Note: you should sign up for your exam early to ensure you get an exam date that fits with your study schedule.
Becoming an EA is a rewarding career path, combining helping people with your accounting knowledge, and having a solid understanding of the Enrolled Agent exam will start your career out on the right foot.
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