If you’re ready to take your tax career to the next level, you may be considering earning your Enrolled Agent (EA) credential or participating in the IRS’s Annual Filing Season Program (AFSP). But which one is best for your specific career? And how do you go about earning each? In this post, we’ll cover the EA vs AFSP, including what each is, how you get them, and what each will mean for your career.
What is an EA?
The Enrolled Agent status is the highest credential the IRS grants, and it’s only given to those who have met a rigorous set of standards. Enrolled Agents are tax professionals who are federally authorized to represent taxpayers before the IRS. They have unlimited practice rights, meaning they can represent any taxpayer, any tax matter, and appeal to any office of the IRS.
Enrolled Agents are considered experts in the field of tax. They can prepare and file tax returns and documents on a client’s behalf, help clients with audits, represent clients in hearings and conferences, and provide written advice to third parties regarding business transactions. EAs can work at large, public accounting firms or they can own their own firm; the array of career trajectories is wide.
How to Become an EA
While a strong background in tax is not required, it’s very helpful to becoming an Enrolled Agent. EA candidates must obtain a Preparer Identification number, and either pass the IRS’s Special Enrollment Exam (SEE) within two years, or have 5 years of experience working in a relevant role within the IRS. Once a candidate becomes an EA, she or he must continue to meet continuing education requirements in order to maintain active status.
Most EA candidates will take the SEE exam in order to become credentialed. The SEE is a three-part exam, covering taxes for Individuals and Business, as well as taxpayer Representation, Practices and Procedures.
Benefits to Becoming an EA
Since EAs have earned the highest credential the IRS offers, they’re understandably considered elite professionals in their field. The biggest benefit of earning your EA credential is you will have verified tax expertise, setting you apart from other tax preparers. It also opens up an array of career doors, since you have limitless representation of clients before the IRS. You can work with more complicated tax returns and legally advise businesses on the tax implications of certain decisions.
What is an AFSP?
Unlike the EA, the AFSP is not a credential, but rather a form of recognition by the IRS for tax preparers who go above and beyond normal requirements. Non-credentialed tax preparers who complete 18 hours of continuing education, including a six-hour federal tax law refresher course with test, will receive an Annual Filing Season Program – Record of Completion form from the IRS. The AFSP is completely voluntary for tax preparers; it’s simply a way to prove you’re committed to the profession.
Tax preparers who obtain their AFSP each year can prepare returns, argue tax law, correspond with the IRS on behalf of their client, and defend tax returns he or she prepared on behalf of clients.
How to Participate in the AFSP
Tax preparers must complete 18 hours of continuing education each year; six of these hours must be an Annual Federal Tax Filing Season Refresher (AFTR) course through an IRS-approved provider, with a corresponding exam. Once the course is complete, tax preparers can print their record of completion from the IRS, which is valid for the upcoming filing year. The AFSP must be done on a yearly basis; tax preparers must complete the AFTR course and meet continuing education requirements every year they want to participate in the AFSP.
Benefits to Participating in the AFSP
Participants who obtain the AFSP each year are included in the IRS’s public database of return preparers. It allows tax preparers a higher level of professionalism while not being too difficult to achieve. AFSP participants will also have more aggressive client representation rights compared to those who don’t participate, including representing clients whose returns they have prepared and signed. This higher level of service will help AFSP participants reach a wider range of clients.
EA vs AFSP: Which is Best for Your Career?
Both programs have their merits, but the basic difference is an EA is a credentialed professional while an AFSP participant is not.
If you want to represent clients before the IRS, have the ability to work in a variety of tax settings, and are willing to put in the time to study and pass a three-part exam, then the EA credential might be for you. If you’d like to prepare returns, represent clients whose returns you’ve prepared before the IRS, and avoid taking an exam, then AFSP participation would be the perfect fit. As you move forward in your tax career, consider which path you’d like to take and which job you’d like to perform, and then obtain the the one that will help get you there.
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