If you’re a tax professional, CPA, or career-changer looking to become an EA, you’ve likely heard of the IRS’s Special Enrollment Examination, or EA exam. This three-part exam is the key to becoming an EA and will help open doors for your tax career. With these 6 tips, you’ll learn how to pass the EA Exam on your first try.
1. Get a Review Course Specifically for the Enrolled Agent Exam
The Special Enrollment Exam is a tax-specific exam created by the IRS. If you have an accounting background, it can be easy to think you can skip purchasing any materials. However, tax accounting and financial accounting are two different areas; you’ll definitely want to dig further into tax topics than your college tax course took you.
An EA review course can help you drill down into tax topics and become more familiar with the tax code, and adaptive study materials will help you learn even faster. Surgent’s ASAP Technology adapts as you study and answer multiple choice questions, helping you identify and correct any weaknesses while also maintaining areas you already know. Taking into account your exam date, ASAP Technology creates a study plan each day to help you stay on track, and features ReadySCORE which corresponds with Enrolled Agent Exam scoring. ReadySCORE evaluates your readiness for the exam and indicates your performance as you move through the materials, giving you a clear idea of when you’re ready to sit and pass the exam.
2. Be Aware of Any New Material
The tax law and IRS publications change constantly; some changes are subtle and some changes, like the 2017 Tax Cuts and Jobs Act, overhaul even the most basic tax matters. As these legislative changes subsequently trickle down into the Enrolled Agent Exam, it’s imperative you know what you’re going to be tested on.
The EA Exam tests the previous year’s tax laws. For example, the Tax Cuts and Jobs Act was passed in late 2017, but the Enrolled Agent Exam won’t feature the changes until the May 2019 through February 2020 testing window. If you want to become an Enrolled Agent, you need to know these changes regardless of the testing window you take the exam, but you also want to make sure you’re studying the right review materials. Make sure you purchase a review course that updates with the Enrolled Agent Exam or stay apprised of any changes featured at www.irs.gov.
3. KNOW the Fundamentals
It’s easy to get wrapped up in the complexity of tax laws, but keep in mind that the Special Enrollment Exam tests for a basic level of competency to represent taxpayers before the IRS. This means each part of the exam will cover U.S. taxation fundamentals and the most common tax issues. There might be some advanced topics thrown into the mix, but if you are 100% confident on fundamentals, you’re going to pass the exam. You may even be able to use your fundamental knowledge to apply principles to more complex tax matters.
4. Memorize Basic Tax Formulas
Similar to knowing the fundamentals, there is a high chance you’re going to have to calculate a variety of basic tax numbers, from Adjusted Gross Income for individuals to deductions for corporations. Memorize the formats of basic tax calculations for individuals and various types of business entities and you’ll make intimidating computation questions a breeze.
5. Get Familiar with Prometric’s Exam Day Expectations
Exam day can be pretty intense if you’ve never sat at a Prometric site before. Testing Centers take specific security measures to ensure proper practices on exam day; this includes fingerprinting, ID scans, and personal scans. This can be stress-inducing if it’s your first time at a testing center and you’re not expecting it, and stress can make or break how you do on the Enrolled Agent Exam. To alleviate any stress, spend some time in the “What To Expect” section of Prometric’s site before test day. It has an in-depth view of the testing experience and will help you feel more relaxed going into the test center on exam day.
6. Learn to Budget Your Time (And Learn When to Move On)
The Enrolled Agent Exam is timed, meaning you need to budget your time to finish the whole thing within the allotted 3.5 hours. Taking practice exams and learning to budget your time is key; you should consistently be checking the time and ensuring you’re on track to see every question before your time is up.
You should also try to budget time at the end for questions you skip, as well as come up with a strategy for skipping. It’s easy to get caught up on complicated calculation questions, and there’s a good chance you’ll run into questions that are completely out of left field. Instead of spending a ton of time trying to figure these questions out, skip them and move on to questions you do know. Then, spend some time at the end circling around to these questions and answering them as best you can. Remember, the exam is mostly fundamentals; if you’re solid on fundamentals you’ll do well on the majority of the exam. Just make sure you leave enough time to hit every question before the end of the exam.
Becoming an enrolled agent will boost your confidence as a tax professional, helping you prepare tax returns and represent taxpayers before the IRS with conviction. Use these 6 tips to help you pass the special enrollment examination and get on your way to your career as an EA.
Liz Kolar, CPA, CGMA, has been teaching CPA Review for more than 25 years in the United States, has personally taught more than 2,500 live sessions, and has helped thousands of candidates pass the CPA Exam. She founded Pinnacle CPA Review and co-founded Surgent Kolar CPA Review.