Enrolled Agent: What Is It and How to Become

Contents

Becoming an enrolled agent (EA) is a rewarding and respected career choice for individuals who possess expert knowledge of tax laws and regulations. Enrolled agents, also known as EAs, are tax professionals authorized by the IRS to represent taxpayers in their dealings with the agency. If you are interested in pursuing a career in tax services and want to become an EA, this article will provide you with an overview of the steps and requirements involved.

Once you have confirmed your eligibility, you can start preparing for the SEE. The examination is administered by the IRS and tests your knowledge on various tax-related topics. To help test-takers prepare for the exam, there are study materials available, such as publications, sample questions, and practice tests. Many individuals also find it helpful to enroll in an EA prep course or hire a specialized EA preparer to assist them in their studies.

Overview of Enrolled Agent Certification

Becoming an Enrolled Agent (EA) is an excellent career choice for individuals who have a strong interest in tax law and the desire to help others navigate the complex world of taxes. An EA is a licensed tax professional who has demonstrated expertise in tax practices and can represent taxpayers before the Internal Revenue Service (IRS).

To become an EA, there are specific steps and requirements that each person must fulfill. The process includes obtaining the necessary education, passing the EA exam, and applying for enrollment with the IRS. Let’s take a closer look at these steps:

Step 1: Obtain the Necessary Education

To be eligible for the EA certification, you need to have a certain level of educational background. You must have either worked for the IRS for a minimum of five years in a position involving the interpretation and application of the tax code or completed a comprehensive tax course that covers the tax code and tax regulations. This education can be obtained through a college or university, or through a tax education provider.

Step 2: Pass the EA Exam

The EA exam, also known as the Special Enrollment Examination (SEE), is a rigorous test that covers various areas of tax law. It consists of three parts, and you must pass all three sections within a two-year period. The exam assesses your knowledge of individual tax returns, business tax returns, and representation and practices before the IRS.

While the exam is challenging, proper preparation and test-taking strategies can significantly impact your chances of passing. There are many resources available, such as study guides and practice exams, to help you prepare for the EA exam and increase your chances of success.

Step 3: Apply for Enrollment with the IRS

Once you have passed the EA exam, you can apply for enrollment with the IRS. This involves submitting an application, paying the necessary fees, and providing documentation to prove your eligibility. The application process can be completed online through the IRS website, making it fast and convenient.

After your application is processed and approved, you will receive your Enrolled Agent certification. This certification allows you to practice as an EA, representing taxpayers before the IRS.

Maintaining your EA certification is also important. Enrolled Agents are required to complete 72 hours of continuing education every three years, including two hours of ethics training. This helps ensure that EAs stay updated on changes in tax laws and regulations.

Becoming an Enrolled Agent is a rewarding career choice for individuals who have a strong interest in tax law and enjoy helping others with their tax issues. It requires obtaining the necessary education, passing a rigorous exam, and applying for enrollment with the IRS.

By following these steps and maintaining your educational requirements, you can establish yourself as a trusted tax professional and provide valuable assistance to individuals and businesses in need of tax guidance.

Understanding the Role of an Enrolled Agent

The role of an Enrolled Agent (EA) is to represent taxpayers before the Internal Revenue Service (IRS) in matters related to tax issues. EAs have a deep understanding of tax laws and regulations and can provide valuable assistance to individuals, businesses, and organizations

What Makes an Enrolled Agent Different?

Unlike other tax professionals, EAs have to pass a comprehensive exam administered by the IRS. This exam, known as the Special Enrollment Examination (SEE), indicates that the agent has a thorough understanding of tax laws, formulas, and regulations. EAs are also required to undergo continuing education to maintain their enrollment status and stay updated with the latest changes in tax laws.

Why Become an Enrolled Agent?

Becoming an Enrolled Agent can be a rewarding career move for those interested in the tax industry. The status of an EA allows professionals to practice year-round and represent clients in any location. EAs can help individuals with basic tax preparation, as well as provide more complex tax strategies for businesses and high-net-worth clients.

As an EA, you can work independently or join an established tax preparation firm. The skills and knowledge acquired during the process of becoming an Enrolled Agent can open doors to various opportunities in the tax industry.

Steps to Become an Enrolled Agent

Discover the different types of IRS certification, including Enrolled Agents.
Register with the IRS for an enrollment number.
Complete the necessary application form and pay the required fees.
Pass the Special Enrollment Examination (SEE) within a 2-year period.
Undergo a background check and maintain a clean record without any felony conviction.

After completing these steps, you will officially become an Enrolled Agent and can start representing taxpayers in their dealings with the IRS.

Tips for Becoming an Enrolled Agent

If you are considering becoming an Enrolled Agent, here are some tips to help you along the way:

Take online or in-person Enrolled Agent courses to prepare for the SEE.
Use study materials and practice exams to review and reinforce your knowledge.
Stay updated with changes in tax laws and regulations to ensure accurate representation.
Consider joining professional organizations or networking groups to connect with other EAs.
Develop a study schedule and stick to it to ensure proper preparation for the exam.

Becoming an Enrolled Agent requires dedication and ongoing commitment to maintaining your enrollment status. However, the rewards of this career path are worth the effort, as it offers numerous opportunities for professional growth and success in the tax industry.

Meeting the Educational Requirements

In order to become an Enrolled Agent (EA), you must meet certain educational requirements set by the Internal Revenue Service (IRS). These requirements ensure that individuals seeking EA certification have the necessary knowledge and skills to represent taxpayers before the IRS.

Enrolled Agent Exam

The first step in meeting the educational requirements is to pass the Enrolled Agent Exam. The exam consists of three parts, each focusing on a different area of taxation – Individuals, Businesses, and Representation, Practices, and Procedures. It is a comprehensive test that assesses your understanding of tax law and your ability to apply it in real-life scenarios.

To prepare for the exam, you should consider studying tax-related materials and taking practice tests. There are multiple test-taking strategies you can use to improve your chances of passing the exam. Once you feel confident, you can register for the exam through the Prometric website.

Education or Experience Equivalents

If you have a college degree in accounting or a related field, you may be eligible for an education equivalent. This means that you can bypass the exam and become an EA by providing transcripts that demonstrate your coursework in taxation, accounting, and business law.

If you don’t have a college degree but have extensive experience in tax preparation and representation, you may qualify for an experience equivalent. This requires you to have at least five years of recent work experience as a tax preparer, bookkeeper, or accountant with a focus on tax matters.

Continuing Education

After becoming an enrolled agent, you must stay updated on the latest tax laws and regulations by completing continuing education (CE) courses. The IRS requires EAs to complete 72 hours of CE every three years, including two hours of ethics.

There are numerous providers of CE courses, including the American Society of Tax Professionals (ASTP) and the National Association of Enrolled Agents (NAEA). These courses cover a wide range of topics, including updates to tax codes, new tax forms, and changes in tax procedures.

Technical Competency Exam

In addition to the Enrolled Agent Exam, the IRS may also require you to pass a separate Technical Competency Exam. This exam focuses specifically on the knowledge and skills required to provide tax services to clients. It is not a requirement for all EAs but may be necessary for individuals who have been out of the tax preparation and representation business for an extended period of time.

Applying for Enrollment

Once you have met all the educational requirements, you can apply for enrollment as an Enrolled Agent. The IRS provides an online application process through its website. You must provide accurate information about your education, work experience, and any certifications you hold.

Upon submitting your application, the IRS will review it and determine whether you meet all the requirements for enrollment. If your application is approved, you will receive your Enrolled Agent certification, allowing you to represent taxpayers before the IRS.

Enrolled Agent Exam	Continuing Education	Technical Competency Exam
Pass all three parts of the exam	Complete 72 hours of CE every three years	May be required for certain individuals
Register and schedule the exam through Prometric	CE courses provided by various organizations	Focuses on specific tax service knowledge and skills
Test-taking strategies can improve chances of passing	Includes updates to tax laws and regulations	Required for individuals out of the tax business for a long time

Preparing for the Enrollment Examination

Before becoming an Enrolled Agent (EA), you’ll need to pass the three-part Enrollment Examination administered by the IRS. This examination covers diverse areas of tax law and is designed to ensure that EAs possess the necessary knowledge and expertise to represent taxpayers before the IRS.

If you’re a former or experienced tax preparer, you may already have the foundational knowledge required for the examination. However, it’s essential to familiarize yourself with the specific areas covered in the exam and any recent changes in tax laws.

While the enrollment examination is challenging, with proper preparation and study, it is entirely possible to pass each part of the exam. Here are some tips to help you be successful:

Develop a study schedule: Allocate dedicated time each day or week to study for the exam. Consistent and regular study sessions will help you retain information effectively.
Use top-tier study resources: Invest in quality study materials from reputable sources. IRS publications, online courses, and test prep companies offer comprehensive study aids to help you prepare.
Understand the exam structure: The enrollment examination consists of three parts, known as Special Enrollment Examinations (SEE) 3121, 3122, and 3123. Each part covers different aspects of tax law, including individual tax, business tax, and representation, practice, and procedures.
Take practice tests: Practicing with sample questions and full-length exams is crucial. It allows you to familiarize yourself with the exam format, timing, and types of questions you can expect.
Seek expert guidance: Consider enrolling in a test prep course or consulting with an EA or CPA who can provide guidance based on their experience and knowledge.
Stay updated on tax laws: The IRS regularly updates tax laws and regulations. Ensure you are aware of any recent changes and study the most up-to-date information.

When registering for the exam, make sure to triple-check that your information is accurate. The IRS requires accurate information to schedule the exams properly.

Once you pass the exam, you’ll need to apply for enrollment with the IRS and pay the required fees. The process includes obtaining a Preparer Tax Identification Number (PTIN) and completing an application form.

It’s important to note the significance and responsibility of obtaining enrolled agent status. As an EA, you are entrusted with confidential taxpayer information and are bound by strict ethical guidelines. Maintaining your EA certification requires annual continuing education to stay up-to-date with tax laws and changes.

Becoming an Enrolled Agent is a rewarding journey that can open doors to various opportunities in tax representation and consulting for individuals and businesses. With thorough preparation and dedication to studying, you can earn the EA certification and join the ranks of respected tax professionals.

Obtaining and Maintaining Enrolled Agent Status

Once you’ve decided that becoming an Enrolled Agent (EA) is the right career path for you, it’s important to understand the process and requirements for obtaining and maintaining this status.

1. Applying to Become an EA

In order to become an Enrolled Agent, you’ll need to meet certain criteria set by the IRS. This includes having a valid Social Security number, being 18 years old or older, and either passing all three parts of the Special Enrollment Examination (SEE) or completing a former IRS employee or certain other types of tax preparation programs.

The SEE is a comprehensive exam that covers all aspects of tax law. It’s important to thoroughly study and memorize the materials provided by the IRS to prepare for the exam. Many individuals choose to enroll in online or in-person review courses or utilize curated resources to help them effectively prepare for the exam.

2. Taking the SEE

The SEE is administered by Prometric, a testing company contracted by the IRS. You’ll need to schedule your exam appointments through Prometric and pay the required fees. The exam consists of three parts, and you’ll need to pass all three within a two-year period. The passing score for each part is 105 out of 150.

It’s important to have a strategy in place for studying for the exam. Break down the exam topics into manageable sections and allocate enough time for studying each area. Utilize practice exams and review materials to assess your understanding and identify areas that need further improvement.

3. Applying for Enrollment

Once you’ve passed all three parts of the SEE, you can officially apply for enrollment as an EA. You’ll need to complete and submit Form 23, “Application for Enrollment to Practice Before the Internal Revenue Service,” along with the required fee. This form will ask for basic personal information as well as your exam scores and other relevant details.

After submitting your application, it will be reviewed and inspected by the IRS. If everything meets their requirements, you’ll be officially enrolled as an EA and receive a certificate from the IRS.

4. Maintaining EA Status

Maintaining your Enrolled Agent status is an ongoing process. The IRS requires that EAs complete at least 72 hours of continuing professional education (CPE) every three years. This helps EAs stay up-to-date with changes in tax laws and regulations.

There are various ways to earn CPE credits, including attending seminars, webinars, and workshops, as well as completing online courses. It’s important to choose CPE programs that are approved by the IRS to ensure they meet the necessary criteria.

In addition to earning CPE credits, EAs must also adhere to a strict code of ethics and professional conduct. This includes maintaining the confidentiality of client information and following IRS guidelines in their tax practice.

What to Expect as an Enrolled Agent

Enrolled Agents have the authority to represent taxpayers before the IRS, which can involve resolving tax issues, negotiating settlements, and preparing and filing tax returns. They are considered tax experts and are often sought out by individuals and businesses for their expertise.

As an EA, you’ll have the opportunity to run your own tax practice or work for a tax firm or accounting firm. Many EAs also choose to specialize in certain areas of tax law, such as estate planning or international taxation.

Being an Enrolled Agent can be a rewarding career choice, but it requires dedication and ongoing learning to maintain your status. By staying current with tax laws and regulations, you can provide valuable assistance to individuals and businesses while also ensuring compliance with IRS policies.

Tips for Becoming and Maintaining an EA

Start studying early and create a study schedule to stay organized.
Utilize online resources and review courses to enhance your preparation.
Take advantage of practice exams to assess your knowledge and identify areas for improvement.
Become familiar with the IRS code of ethics and professional conduct to understand your responsibilities as an EA.
Stay up-to-date with changes in tax laws by regularly participating in continuing professional education programs.
Consider joining professional organizations and networking with other EAs to stay connected and informed.

FAQ

What is an Enrolled Agent and what do they do?

An Enrolled Agent is a tax professional who has passed a rigorous exam administered by the IRS. They are authorized to represent taxpayers before the IRS and help with tax planning, preparation, and resolution of tax issues.

What are the eligibility requirements to become an Enrolled Agent?

To become an Enrolled Agent, you must either work for the IRS for at least five years in a position that regularly involved applying and interpreting the provisions of the Internal Revenue Code, or pass all three parts of the Special Enrollment Examination (SEE).

What is the Special Enrollment Examination (SEE) and how can I schedule it?

The Special Enrollment Examination (SEE) is a three-part exam that tests your knowledge of tax laws, regulations, and procedures. To schedule the exam, you can visit the Prometric website and choose a convenient date and location for each part of the exam.

How long does it take to become an Enrolled Agent?

The time it takes to become an Enrolled Agent can vary depending on your individual circumstances and the time you dedicate to studying for the Special Enrollment Examination (SEE). On average, it may take several months to prepare for and pass all three parts of the exam.