Are you interested in a career in tax preparation but hesitant about the years of education and the financial commitment required to become a CPA?
Becoming an Enrolled Agent might be your perfect path.
As the highest credential awarded by the IRS, an EA certification enables you to represent clients directly before the Internal Revenue Service without extensive prerequisites. This credential offers you a direct path to a professional and respected position in tax administration. It allows you to bypass the lengthy and costly process associated with other tax professional certifications.
This is why passing the Special Enrollment Exam AKA the SEE or the EA exam is one of my top recommendations for tax preparers or those who want to make a career out of tax issues.
In this article, I’ll guide you through the steps to achieving the EA designation, from getting a PTIN to passing the SEE and much more.
Let’s explore how you can start this journey and how to become an Enrolled Agent in just 8 steps.
Key Takeaways
- Obtain a PTIN: Becoming an Enrolled Agent requires obtaining a Preparer Tax Identification Number from the IRS, which is essential for anyone preparing tax returns professionally.
- Select an EA Review Course: Pick a solid EA exam prep course with comprehensive content, realistic practice tests, and expert instructors to ensure success on the SEE.
- Pass the Special Enrollment Examination: Complete all three parts of the SEE within three years, focusing on individual and business tax returns and representation practices.
- Formal Enrollment and Suitability Check: After passing the SEE, apply for formal enrollment and pass a suitability check, which includes verifying tax compliance and conducting a criminal background check.
- Continuing Education and PTIN Renewal: Maintain your EA status by completing 72 hours of continuing education every three years and renewing your PTIN annually to stay compliant and capable of representing clients.
“…If you like taxes but have no plans to audit, the EA designation will work for you. You can do something CPAs cannot – you can represent anyone in any state in the US; the licensure comes directly from the Department of Treasury…”
the_undertow
Initial Steps to Become an EA
1. Obtain a Preparer Tax Identification Number (PTIN)
Before you can become an Enrolled Agent, you need a PTIN from the IRS. This number is essential for anyone who prepares federal tax returns for compensation. Obtaining your PTIN is straightforward:
- Apply for your PTIN online.
- The process is quick, usually completed in a few minutes, and you’ll receive your PTIN immediately upon completion.
The Special Enrollment Examination
2. Register and Prepare for the Exam
Once you have your PTIN, the next step is to prepare for and pass the IRS Special Enrollment examination. To do this:
- Visit the Prometric SEE webpage to schedule your test appointments. Planning is vital, as you need to pass all three parts of the SEE within three years.
- Choosing the right EA preparation course is essential for success on the Special Enrollment Exam. Look for a course that offers comprehensive coverage of the exam content, practice tests that mimic the real SEE, and access to experienced instructors. Picking one of the best EA prep courses can equip you with the necessary knowledge and confidence to excel on the exam and advance your career as an Enrolled Agent.
3. Achieve Passing Scores
Unlike the exam required of certified public accountants, the SEE only consists of three parts. Each focuses on different aspects of tax law and representation.
You must pass all three parts of the EA exam to proceed:
- Part 1: Individuals
- Part 2: Businesses
- Part 3: Representation, Practices, and Procedures
Passing this examination demonstrates your comprehensive tax knowledge and ability to represent taxpayers effectively before the IRS.
Formal Recognition
4. Apply for Enrollment
After passing the SEE, apply for formal enrollment to practice before the IRS:
- You can apply online via Pay.gov by submitting Form 23, or you can download the form and mail it with a check to the IRS.
- There is an enrollment fee, which you can pay during the online application process or include as a check if you mail your application.
5. Pass a Suitability Check
To finalize your enrollment, you must pass a suitability check. This includes:
- Tax compliance verification to ensure you do not have tax liabilities and have filed all of your past returns.
- A criminal background check to assess your general suitability for representing taxpayers.
Maintaining Your Status
6. Renew Your Status Every Three Years
- As an Enrolled Agent, you must renew your enrollment status every three years to continue practicing.
- The IRS requires that you complete 72 hours of CPE every three years, with a minimum of 16 hours per year. This education must include two hours on ethics. You’ll want to use a trusted provider to maintain your Enrolled Agent status.
7. Renew Your PTIN Annually
- Remember to renew your PTIN annually. This is crucial for maintaining your eligibility to prepare tax returns and represent clients.
“If you work for Intuit as an employee (20 hours/week minimum) they actually encourage you to have your own business with your own clients. They will give you a steep discount on their professional tax software, limited to first 100 tax returns.”
u/nofattyacid
8: Start Your Career as An EA (Bonus Step)
A career as an EA opens doors to both employment and entrepreneurship. Once you are approved, you’ll be ready to launch your career in tax for others or for yourself. For instance, if you work at least 20 hours per week for a company like Intuit, they encourage you to manage your own tax business. Intuit supports this by offering a steep discount on their professional tax software for your first 100 tax returns. This benefit allows you to leverage high-quality resources as you build your client base, seamlessly combining your roles as an employee and an independent tax professional. Such initiatives can accelerate your career development, equipping you to handle a variety of tax scenarios effectively.
Final Thoughts
Becoming an EA offers a viable and rewarding alternative to the lengthy and expensive path of becoming a Certified Public Accountant. By following the clear steps outlined in this article—from securing your Preparer Tax Identification Number (PTIN) to passing the Enrolled Agent exam—you set the foundation for a career in tax preparation and representation.
Once certified, maintaining your EA status through continuing education and annual PTIN renewal ensures your skills remain sharp and your qualifications are current. If you’re eager to step into a role that allows you to handle complex tax issues and represent clients before the IRS without the extensive prerequisites of other tax professions, becoming an Enrolled Agent could be the perfect fit for your career aspirations.
FAQ
First, you’ll need to get a PTIN. Next, pass all three parts of the Special Enrollment Examination, which covers individual and business tax returns, as well as representation, practices, and procedures. After passing the exam, apply for enrollment and pass a suitability check, including a tax compliance check and a background check.
No, you do not need a specific degree or background to become an Enrolled Agent. While having a background in tax, accounting, or law can be beneficial, it is not required. The main EA requirement is passing the SEE administered by the IRS, which tests your knowledge of tax law and representation procedures. This makes becoming an Enrolled Agent accessible to a wide range of candidates who are willing to study and demonstrate their tax expertise.
Enrolled Agents must complete 72 hours of CPE every three years to hold the designation. This must include a minimum of 16 hours per year, two of which must be on ethics. These courses must be taken from IRS-approved providers to ensure they meet the necessary standards.
Renewal of Enrolled Agent status is required every three years. This involves submitting a renewal application (Form 8554) during the renewal cycle and ensuring that you have met the continuing education requirements. It’s crucial to maintain compliance with IRS regulations and have no outstanding tax liabilities to renew successfully.
Yes, Enrolled Agents have the unique advantage of being able to represent clients in all 50 states without limitation. Their federal authorization allows them to handle tax matters with the IRS nationwide, providing significant flexibility in their practice.
