An Enrolled Agent (EA) is the only federally licensed tax practitioner who specializes in all areas of taxation. Enrolled Agents represent taxpayers before the Internal Revenue Service (IRS) for tax issues including audits, collections and appeals. EA is the highest credential awarded by the IRS and is also licensed by the IRS. The EA credential is recognized across all 50 U.S. states.
Enrolled Agents are required in small and large public accounting firms, law firms, and corporate accounting departments, state departments of revenue, investment firms, banks and in private practice. An EA can guide, represent and prepare tax returns for individuals, corporations and trusts.
Why should one become an EA?
Practice before the IRS includes all matters related to presentations for the IRS, regarding client’s rights, privileges and liability under laws and regulations that are administered by the IRS.
There are many benefits of becoming an EA:
- Being an EA gives one the opportunity to grow and move forward in their career.
- Being an EA increases your earning potential by an average of 10%.
- It is a prestigious credential and therefore, will, in turn, earn the respect of others.
- Helps you establish your expertise and improve your accounting skills and knowledge.
- Will help you with your personal as well as professional development.
How can one become an Enrolled Agent (EA)?
Becoming an EA is a great way to show your clients that you are committed to meeting their needs as EA’s has unlimited representation rights. Without an EA credential, a Tax preparer will only be able to represent clients whose tax returns have been prepared and signed. Whereas with an EA credential, you can represent your clients before the IRS on any matter including audits and appeals.
Basics that one needs to follow to become an EA are:
- Become completely knowledgeable about the EA Exam.
- Applicants must obtain or review a PTIN.
- Schedule your EA exam.
- Prepare your study schedule for the EA exam
- Take the Exam.
One needs to attain passing scores on all three parts of the Special Enrolment Examination, which are – Individuals, Businesses and Representation, Practices and Procedures, they basically cover many aspects of the Internal Revenue Code.
IRS Requirements to be Certified:
Education & Experience:
There isn’t any particular educational or experience requirement for the exam. However, candidates should be proficient in answering income and tax accounting questions.
You need to pass all three exam parts within a period of 2 years. You must have a Preparer Tax Identification Number (PTIN) renewed within the last year in order to register for the examination successfully.
You need to pass a suitability check which includes both a tax compliance check and a criminal background check. In order to maintain your designation, you would need to complete 2 hours of ethics continuing professional education each year after you pass your exam.
The Special Enrolment Exam (EA Exam):
The IRS selected Prometric to develop and administer the EA exam. The Exam Content Outlines (ECOs) and test questions were developed based on the survey’s findings. The different parts of the exam can be taken in any order. Each year, some changes should be expected from prior examinations as emphasis shifts based on subsequent findings and since tax laws are passed or repealed.
The only requirement is that applicants must pass all three sections in order to earn the EA certification. Prometric maintains a website where candidates can learn more about the SEE and register for the test.
EA Exam Format:
The EA exam consists of three different parts with 3.5 hours of testing time for each part. Each of the exam parts contains 100 Multiple Choice Questions (MCQ’s) and covers a wide spread of taxation related topics.
The three parts of the EA exam are:
- Part 1: Individuals
- Part 2: Businesses
- Part 3: Representation, Practices & Procedures
EA Exam Passing Score:
The IRS sets the scaled passing score at 105, which corresponds to the minimum level of knowledge deemed acceptable by professionals practising before the IRS. Exam scores are confidential, and they are only revealed to the candidate.
EA Exam cost:
The main fees to take the exam include:
- Application Fees: As part of the EA registration process, There are $21 fees for PTIN registration. According to the IRS, all enrolled agents must have a PTIN.
- Scheduling fee: The scheduling fee for each part of the exam is $184.
- Enrolment to practice fee: This Enrolment to practice before the IRS Application fee is $30. Once you pass the exam and are ready to become an EA, you must pay $30 to the IRS in order to complete the enrolment process.
There is a growing need for representation since, in recent years, an increase in IRS enforcement has resulted in the need for more taxpayer assistance. Enrolled Agents have unlimited earning potential. This is a recession-proof career as people would always be paying taxes, and they will always need help with their taxes.
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