Enrolled Agent 72 Hours of Continuing Education
How to Become an Enrolled Agent
Becoming an enrolled agent can take your tax-preparing skills to another level. Read on to learn how to earn a license and access additional resources.
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Professionals who help clients with taxes may benefit from becoming enrolled agents (EAs). The IRS empowers EAs with tools unavailable to most other tax preparers. These professionals can speak on clients' behalf, argue disputes, and make cases to the federal taxation authorities. EAs can handle virtually any situation that may arise in the case of a taxpayer.
Explore why tax preparers and accountants might consider pursuing the EA credential in this guide. We also cover how to become an enrolled agent and prepare for the EA exam.
Why Get an Enrolled Agent License?
The EA credential can verify your credibility, open doors to new careers, and attract work opportunities. Tax preparers, accountants, and those wanting to move into tax preparation can gain confidence with an EA license.
- Earning Potential
- When it comes to tax preparation, EAs can do many tasks a client needs. These professionals can argue tax law, discuss audits with the IRS, deal with the IRS collections department, and make appeals. Not everyone can provide these services, which puts EAs in high demand and a position of great earning potential.
- National Credentials
- The EA credential is a federal designation handed down by the U.S. Department of the Treasury. This allows you to work anywhere in the country. Alternatively, CPA licensure is state-specific with certain restrictions. Clients know that enrolled agents can work across state lines.
- Job Stability
- EAs enjoy steady work from individuals, tax-prep firms, law firms, accounting firms, and other corporations. Virtually everyone must pay taxes of some sort, and the ever-changing tax code means even more job security for enrolled agents.
What Are the Enrolled Agent Requirements?
EA certification follows a straightforward process. Applicants do not need to hold a particular degree or meet experience requirements.
EA candidates must apply for a preparer tax identification number (PTIN), sign up for the certification exam, and pass all parts of the exam. They must also submit IRS applications and pass background checks.
Since the EA license holds federal recognition, requirements do not vary by state. Current tax preparers and accountants may find themselves well equipped to pass the qualifying exam and become enrolled agents.
Educational Requirements
The IRS does not require any specific educational background to become an enrolled agent. Applicants have to pass each section of the three-part exam and undergo a background check.
Aspiring EAs may find that an accounting degree sets them apart from their peers. Candidates who already hold undergraduate degrees may boost their skills and knowledge with a certificate in accounting or master's in taxation.
- Read about certificate programs in accounting
- Read about associate degree programs in accounting
- Read about bachelor's degree programs in accounting
- Read about master's degree programs in taxation
Professional Requirements
The IRS lists three steps to becoming an enrolled agent:
- Obtain a PTIN through the IRS.
- Schedule and pass the EA licensing exam. Candidates can then apply for enrollment through the IRS website.
- Undergo a background check. Background checks look at income tax history and any criminal background.
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What Does the Special Enrollment Exam Cover?
The enrolled agent exam is called the special enrollment exam (SEE). The SEE consists of three sections: taxation and individuals; taxation and businesses; and representation, practices, and procedures. All questions are multiple choice.
The table below breaks down each exam section:
SEE Exam Structure
| Part One: Taxation and Individuals | Part Two: Taxation and Businesses | Part Three: Representation, Practices, and Procedures |
|---|---|---|
|
|
|
Test-takers must schedule four hours for each section. This includes 3.5 hours to take the test and 30 minutes for a pre-examination tutorial and post-examination survey.
Candidates do not have to take all parts of the test on the same day or on consecutive days. They also do not have to complete the parts in any particular order. Prometric only offers the exam at its testing sites and not through off-site proctors.
Scoring the Exam
The EA licensing examination contains three parts, each consisting of 100 multiple-choice questions. Of those 100 questions, 85 questions count toward the test-taker's score. The other 15 questions are experimental and are not scored. Each question is marked right or wrong. No weighting system applies to the final score.
The IRS uses a scaled scoring system for the SEE. This approach evaluates the total number of questions answered correctly against the number of questions on the exam. The system converts this number to a scale that runs from 40-130. Test-takers must earn a scaled score of 105 or higher to pass.
At the end of the exam, candidates receive a notification on their computer screen indicating that they have passed. They will not see their scaled score. The IRS only determines if a test-taker is qualified, not how qualified they may be.
Test-takers who fail receive their scaled score of 40-104 and diagnostic information indicating which areas need improvement. The system ranks a candidates' performance in each exam area on a scale of 1-3. A score of one shows an area of weakness, while three indicates relative strength.
SEE Exam Scoring
| Section | Questions | Average Pass Rate |
|---|---|---|
| Individuals | 100 | 66% |
| Businesses | 100 | 74% |
| Representation, Practices and Procedures | 100 | 83% |
How Do You Register for the EA License Exam?
To register for the EA license exam, candidates must first create a Prometric account. Prometric requires an email address, a PTIN, a street address, and a government-issued identification document to open an account. The IRS provides a PTIN through its website.
Candidates can then choose a Prometric test center and date to take the exam. Candidates can only schedule an exam date within a six-month window.
EA candidates who do not pass part of the exam may retake that section up to four times within the testing window.
Paying for the Exam
Each part of the SEE costs $185, which is due upon registration. This fee is nontransferable and nonrefundable.
Test-takers who fail the exam must pay the same fee to retake the test. To maximize the value of their investment, candidates should wait to register until they are fully prepared to take the exam.
Candidates who pass the exam must pay a $67 enrollment fee when they apply to practice before the IRS.
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How Can You Prepare for the Enrolled Agent Exam?
For most test-takers, preparing for the SEE entails months of dedicated studying. Aspiring EAs may enroll in a course or purchase online study materials to help navigate SEE content.
Top Tips for Prospective EA Accountants
- Review Prometric's Sample Test Questions
- Prometric is the testing and assessment company that offers the SEE on behalf of the IRS. The company provides a 100-question simulated SEE. This test also introduces candidates to the technology, functions, timed approach, and best practices relevant to the SEE. These resources do not cost money.
- Commit to 150-200 Hours of Study
- Becoming an EA requires one exam. Thus, the exam covers rigorous topics spread over three 100-question sections. Test-takers often spend more than 10 hours just taking the SEE. Effective preparation for this test requires 150-200 hours of study.
- Go to the Source
- The internet offers plenty of data and information about the SEE. Test-takers should be selective with their study resources. The IRS is the most accurate source of information about U.S. taxation. Data from other sources may be out of date or inaccurate.
- Enroll in a Prep Course
- Community colleges and educational assessment companies offer online and in-person preparation courses for aspiring EAs. These programs may include computer-based lessons, study guides, lectures, or practice exams. Some programs offer access to learning aids, like digital flashcards or simulated exams. Others provide one-on-one support.
- Hire a Tutor
- Hiring an experienced tutor can create accountability and support for test prep. Exam-takers can search for qualified tutors using online education boards or social media. The best tutors have passed the SEE and have personal experience with income tax preparation and adult education.
Practice Exams and Study Resources
The IRS is the definitive source of information regarding the SEE, becoming an EA, and the EA retirement program. Aspiring enrolled agents can discover the latest news affecting their profession and stay up to date with certification requirements.
Founded in 1972, this community of tax practitioners serves more than 10,000 professionals. The association's site offers extensive information on becoming an enrolled agent, plus tips for passing the SEE. The NAEA also provides continuing education opportunities and career development resources.
An international test administration agency, Prometric administers the SEE on behalf of the IRS. Test-takers can access a variety of resources through Prometric. Resources include extensive information about the test, scoring, and retesting. Prometric also offers a 30-minute test simulation.
What Is Needed to Maintain EA Accounting Certification?
Enrolled agents must renew their certification with the IRS every three years. Each EA's renewal year is determined by the last digit of their Social Security number. Agents can file their renewal applications online or on paper.
Based on their renewal cycle, each agent must complete 72 hours of continuing education, with a minimum of 16 hours each year. At least two hours per year must focus on ethics. An IRS provider must conduct the continuing education experiences.
Should You Get Multiple Certifications?
The IRS only offers EA certification. However, enrolled agents may hold additional accounting or tax certifications.
A certified public accountant (CPA) license, for example, allows accountants to work in auditing, accounting, and financial planning. Enrolled agents may also become certified tax preparers and work with private companies.
EAs who also hold CPA licensure and wish to investigate financial crimes might consider becoming certified in financial forensics (CFF). The American Institute for Certified Public Accountants offers CFF certification to CPAs. Candidates must have a bachelor's degree and have completed at least 75 hours of professional education in the last five years.
- Learn how to earn a CPA certification
- Learn how to earn a CFF certification
- Learn how to earn a certified tax preparer certification
Frequently Asked Questions About EAs
What does an enrolled agent do?
An enrolled agent represents taxpayers before the IRS. EAs may prepare and file tax returns or handle communication between the IRS and a taxpayer undergoing an audit. EAs may not represent taxpayers in tax court.How do you become an enrolled agent?
Becoming an enrolled agent begins with obtaining a PTIN. Candidates must then pass all three parts of the SEE. Finally, prospective EAs apply for enrollment with the IRS and pass a suitability check.How long does it take to get an EA certification in accounting?
How long it takes to get EA certification depends on the candidate's tax law and accounting knowledge. Well-prepared test-takers may pass the exam with little additional study. Other candidates may need several months of preparation time.Is an EA accountant higher than a CPA?
EA accountants hold licensure with the IRS and may represent taxpayers before the agency. CPAs have licensure at the state level. According to Payscale, CPAs earn about 35% more than EAs as of November 2021.Featured Image: PhotoAlto/Eric Audras / PhotoAlto Agency RF Collections / Getty Images
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Source: https://www.accounting.com/certifications/enrolled-agent/
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