If you’re an experienced accounting tax professional and looking to add a more tax-focused and nationally recognized credential to your resume, if you’re a tax preparer looking to advance your skills, if you’re seeking a new, fulfilling career working with and helping others, or even if you’re just looking to help people, then consider getting the Enrolled Agent certification.
So, what precisely does an Enrolled Agent (EA) do? How do you obtain this certification after deciding it is your right professional path? Well! Let’s discuss the job responsibilities and the requirements and walk you through the steps to achieve the Enrolled Agent certification.
Like CPAs and attorneys, EAs are officially authorized to represent taxpayers before the IRS and have unrestricted representation privileges. Hence, whether or not they prepare returns for them, EAs are permitted to represent any taxpayer. Also, EAs can represent any tax issue and file an appeal with any IRS office.
The EA course exam is conducted on behalf of the Internal Revenue Service and is formally known as the Special Enrollment Examination (SEE). The IRS Special Enrollment Exam (SEE) is the simplest exam that grants you limitless representation privileges to test your skills in front of the IRS.
If you want to pursue EA and get an Enrolled Agent certification, you are not needed to have any prior qualifications. For example, graduates with a basic understanding of accounting are eligible to apply, but they must demonstrate their proficiency in the subject matter related to taxes. It may occur in one of two ways:
Pass the Special Enrollment Exam (EA Exam): A candidate must pass all three sections of the Special Enrollment Examination (Individuals, Business and Representation, Practices, and Procedure) with PTIN passing scores to pursue their ambition of getting the Enrolled Agent certification. This exam covers a substantial portion of the Internal Revenue Code.
There is no pre-specified method or way to take the exam in a specific order. Any portion may be chosen as the first by the candidate. The sole need to obtain the EA certification is to pass each of the three parts.
IRS Experience: Applicants must have experience applying and interpreting the Internal Tax Code’s provisions as well as rules about income, inheritance, gift, employment, or excise taxes throughout the course of five years with the IRS.
It might take 3 to 8 months to get an enrolled agent certification, depending on your level of tax understanding. Depending on how many hours you must study, your EA exam journey might last several months. It may take you several hundred hours to prepare for all three sections if you are unfamiliar with the current tax code.
Your credit for the first section of the EA exam that you pass is valid for two years from the passing date. So, if you want to save your credit for the section you passed and avoid retaking it, you must pass the final two sections within those two years. To take the EA exam a fifth time, you must wait until the following testing window if you don’t pass a section after four attempts within the current testing window.
There are three sections to the EA exam:
Part:1 – Individuals
Part:2 – Businesses
Part:3 – Representation, Practices & Procedures
The candidates are free to administer the exams in any sequence. The exams are administered year-round in India (New Delhi, Bangalore, and Hyderabad) except for March and April. You must select one of four possible responses for each question in the multiple-choice portion of the exam. The new tax legislation that went into effect last year is the basis for the exam question.
There are 100 questions in total, 85 of which are scored, while the remaining 36 are experimental. Also, the exam consists of five portions, and candidates have 3.5 hours to do it. A candidate must have a grade of 105 to pass the EA exam and get an Enrolled Agent certification. You are considered to have failed if you receive a grade of 104 or less on a scale of 40 to 130.
All three segments of the EA exam have incredibly high success rates. The pass percentage ranges from 70% to 74%, even when the average of the three sections is taken into account. Applicants should allocate at least 10 hours each week for their exam preparation. Each of the key subjects must be studied in depth for an average of five hours by candidates.
No special prerequisites are needed if candidates want to enroll in the EA course and acquire an Enrolled Agent certification. Everyone with a basic accounting understanding and at least 18 years old can take up this course. The EA course is open to students who have finished or are currently pursuing their 11th and 12th grades with a Commerce or Economics focus.
You can enroll in the EA course if you have a B.Com, B.B.A., B.M.S., or a related degree. Students who are pursuing or have finished their M.Com., Inter. CA, but do not want to pursue CA, can also gain a lot from this course. Dropouts from other Commerce programs are welcome to enroll in this course, which is another fantastic feature.
Although formal schooling is not necessary to receive an Enrolled Agent certification, having prior experience in the tax industry is advantageous. Yet regardless of their prior employment, anybody can become an EA if they meet the requirements set forth by the IRS.
Here are seven steps you may take to start your EA career:
Investigating the requirements is the first step toward becoming an enrolled agent. Investigate your options for a profession and think about what an EA job may be like for you. The IRS website provides a list of the requirements that applicants must fulfill to take the EA test. Applicants need to have five years of experience working with customers to provide tax advisory, compliance, or representation services. Also, the candidates must pass a three-part exam covering both individual and corporate tax law.
The application for enrollment as an agent, IRS Form 23, must be finished as the following step. Both the candidate and a certified public accountant or licensed practicing attorney must sign this document.
You must register for each section of the exam you intend to take through Prometric, which conducts the test on behalf of the IRS, before making an appointment to take it. The current application cost is $100, and Form 23 must be provided with it.
The applicant must set up an appointment for fingerprinting after submitting Form 23 and the required application fee. A background check, which is necessary as part of the enrollment procedure, will be done using fingerprints.
Individual and corporate tax law issues are covered in the three parts of the Enrolled Agent Exam. During each exam part, the total number of questions is subtracted from the total number of right answers, and the results are then converted to a scale from 40 to 130. To receive their Enrolled Agent certification, applicants must pass all three test sections.
Every expert who helps customers file their taxes must have a current PTIN. In addition, candidates must apply for a Preparer Tax Identification Number once they have passed the Enrolled Agent Exam. To represent clients before the IRS, you must have a PTIN. By initially creating an online account on the IRS website, you may apply for one. Your social security number, any relevant company information, personal information, information on your professional certifications, and information regarding your prior year’s tax returns must all be included in the web application. Your preparer tax identification number is issued online by the IRS upon submitting this information and payment of the required fee.
You take part in continuing education to retain your Enrolled Agent certification in good standing. To retain their certification every three years, enrolled agents must complete a minimum of 72 hours of continuing education credits. Conference attendance, enrollment in the enrolled agent course, and journal reading are all ways to obtain these credits. Two hours of continuing education were dedicated to the job’s ethical considerations.
The Enrolled Agent certification will be a great career choice, leading to new & lucrative opportunities and allowing you to explore them. For individuals ready for the challenge, becoming an enrolled agent is a process that calls for focus and perseverance. Yet, it may lead to a fulfilling profession.
You can always join NorthStar Academy (NSA) to receive help with your endeavors and get the instruction you need to ace the EA certification exam and get the Enrolled Agent certification on your very first try. Students and working professionals can take the well-structured EA course and give their careers the kick-start required.
To speak with one of our counselors, call us at +91 8147470707 or send us a message to get your doubts resolved.
There are no prerequisites necessary to register for Enrolled Agent. However, an applicant for the Enrolled Agent course should only have a basic understanding of accounting. Students can enroll as agents in one of two ways:
By passing a three-part full IRS examination
Applicants had five years of continuous employment with the IRS in a job that routinely involved interpreting and applying the rules of the Internal Tax Code.
No, one doesn’t need to be a US citizen to get an Enrolled Agent certification. However, these days, the only option for a job as an enrolled agent is to work in the United States or for US-based companies in other countries. Registered EAs in India cannot pursue a profession unless they are connected to and employed by a foreign corporation.
Despite how intimidating the EA Exam is, it’s not as difficult as many make it out to be if you prepare well. You must study diligently to pass because this is not a normal exam. The first section of the exam is easy to moderately challenging, although it is time-consuming. The Part 2 exam is of moderate complexity, and the exam preparation is simple.
Enrolled Agent certification provides great job stability and the potential to hold positions of power nationwide. In the upcoming years, there will likely be an increase in the need for tax services, and enrolled agents will be well-positioned to satisfy this demand. An enrolled agent’s position might offer lucrative compensation and a rewarding career.
Although yearly EA salaries in the US range from $25,500 to $97,000, the bulk of EA salaries right now are in the region of $45,000 to $68,500, with top earners getting $86,500 or more.
EA examination fees are $182 per part, paid during appointment scheduling. The test fee is not refundable and cannot be changed. After passing the exam and deciding you are ready to become an EA, you must pay the IRS $30 to complete the enrollment procedure.
It might take 3 to 8 months to get the Enrolled Agent certification and become an enrolled agent, depending on your level of tax understanding.