The Definitive Guide to Becoming an Enrolled Agent
What is an enrolled agent?
By definition, an Enrolled Agent (EA) is a tax professional who has achieved the highest credential the Internal Revenue Service offers. EAs are federally authorized to represent taxpayers before the IRS and, like CPAs and attorneys, have unlimited representation rights. This means EAs can represent any taxpayer, whether they prepare returns for them or not. EAs can also represent any tax matter and appeal to any office of the IRS. Unlike the CPA credential, which falls under state boards for licensing, continuing education, and other compliance matters, the EA credential is valid in any state. An Enrolled Agent (EA) is a federally accredited tax practitioner who may represent taxpayers before the IRS. EAs are granted unlimited rights to represent any taxpayer for any tax matter before any IRS office.
Steps to become an Enrolled Agent
1. Obtain a Personal Tax Identification Number (PTIN)To obtain a PTIN, you will need your social security number, your personal information, your business information, your previous year’s individual tax return, an explanation for any felony convictions, an explanation for any issues with tax obligations, and any U.S. based professional certification information. Once you’ve gathered all of your information, you can create an account on the IRS website. Then you can apply for your PTIN. If approved, your PTIN will be provided to you electronically.
2. Study for the Special Enrollment Examination (SEE)There are three parts to the exam: Part 1: Individuals Part 2: Businesses Part 3: Representation, Practices, and Procedures All of the information on the exam is publicly available via the IRS’s website. However, there is no set route of study on the website, and it is very difficult to sift through all of the information and decide what is relevant to the exam. Instead, consider an EA Review course to help you study quicker and more efficiently for the exam. Surgent EA Review features A.S.A.P. Technology, a proprietary adaptive learning solution that helps students study more efficiently through an algorithm that tailors learning to your individual knowledge and study progress.
3. Register for the SEEOnce you have some studying under your belt, it’s time to register for one or more parts of the exam. You can take them in any order you choose. You can register for the SEE via Prometric’s Special Enrollment Examination webpage; be sure to schedule early as slots can sometimes fill up. It’s also a good idea to review the Candidate Information Bulletin.
4. Take the SEEAll three parts of the SEE must be passed within a two-year window. Each exam lasts 3.5 hours and contains 100 multiple choice questions. A minimum score of 105 is required to pass. You will need to achieve a passing score on all three parts of the exam to become an Enrolled Agent.
5. Apply for EnrollmentOnce you’ve passed all three parts of the Enrolled Agent Exam, you can apply for enrollment to practice before the IRS by filling out Form 23. The cost to apply is $30.
6. Pass a Sustainability CheckCandidates who apply for enrollment must pass a suitability check, including a tax compliance check and background check.
7. Start Your New CareerEnrolled Agent jobs can be found in a variety of organizations from large public accounting firms to small accounting businesses. Enrolled Agents can also start their own tax business. The opportunities for tax preparers become more varied with Enrolled Agent status, and candidates will find that career doors open up with the certification.
1. Will I still be able to represent clients before the IRS if I don’t participate in the Annual Filing Season Program?
As a PTIN holder, you will continue to have limited representation rights before limited offices of the IRS with respect to clients whose returns you prepare and sign until December 31, 2015. However, since 2016 only AFSP participants who obtain a Record of Completion will have those limited representation rights before the IRS for clients whose returns they prepared and signed after December 31, 2015. PTIN holders without an AFSP – Record of Completion or without other professional credentials will not be able to represent clients before the IRS in any matters for returns prepared and signed after December 31, 2015.
Attorneys, CPAs, and EAs will continue to have unlimited representation rights and can represent clients before any office of the IRS.
2. Should I Sit for the Enrolled Agent Exam if I’m already a CPA?
It’s definitely recommended! Many CPAs have chosen to obtain sit for the Enrolled Agent Exam and earn the credential because it provides the same IRS representation rights as a CPA. But, unlike the CPA, an EA is recognized in all 50 states. This eliminates the applying to each individual state board of accountancy each time you move. It also allows you to effectively provide services to clients in any state. This is a great benefit for accountants approaching retirement and want the flexibility of travel.
Enrolled Agents may not provide an opinion on a financial statement like a CPA, so if your practice is both assurance and tax, you will need your CPA license for any state where you do assurance work. However, if your practice is focused on tax and you want to be able to have tax clients from anywhere in the US, the EA option is a very effective option that is also very economical.