An enrolled agent is essentially a tax expert; they are federally licensed tax practitioners and have rights to represent taxpayers before the IRS. To become an enrolled agent, you must either pass a comprehensive exam that requires expertise in tax code, or you must have worked for the IRS for five years in a position that had to apply tax code and regulation. Also, with any government position, you will have an extensive background check. If you think that becoming an enrolled agent is right for you, here are the steps required:
Education
Contrary to popular belief, becoming an enrolled agent does not require a bachelor’s degree. There is room in the industry for those with only high school diplomas to also become EAs. You can, however, still earn bachelor’s and master’s degrees that relate to the field—such as accounting, finance, and taxation. Instead the IRS focuses a vast knowledge of tax law that requires a few steps outlined below.
Obtaining a PTIN
The Preparer Tax Identification Number, or PTIN, is obtained through an application. Here are the things you must have before you apply:
- Your Social Security Number
- Personal Information
- Business Information
- Previous year’s individual tax return
- Felony convictions (if any)
- Individual or business tax obligations (if any)
- Credit or debit card for the $50 fee
- Any CPA, attorney, enrolled retirement plan agent, enrolled actuary, enrolled agent, state licenses or professional certification, or certified acceptance agent.
After you gather all of this information, you can create an account online, apply online using this information, and pay your fee. After the bank confirms your payment, your PTIN is provided online.
The SEE
The Special Enrollment Examination, or SEE, is required in the process of becoming an EA. You must create an account online through prometric.com in order to schedule your exam. The exam outlines are as follows:
- Part 1 – Individuals. The section has 85 questions regarding individual taxpayers. The first seventeen questions deal with preliminary work and taxpayer data. The next 21questions are about income and assets. Following that are 21 questions regarding deductions and credits. Then there are fourteen questions about taxation and advice, followed by twelve questions about specialized returns for individuals.
- Part 2 – Businesses. The first 28 questions ask about business entities. The next 39 questions are about business financial information, followed by 18 questions regarding specialized returns and taxpayers.
- Part 3 – Representation Practices. This includes 25 questions about practices and procedures, 24 questions about representation before the IRS, 19 questions about specific types of representation, and finally 17 questions about completion of the filing process.
Having this many questions to answer may seem daunting, but it is certainly doable. There is study material you can utilize beforehand. Consider enrolled agent training to help you prepare for the exam.
Continuous Education
After you become a licensed EA, you will still be required to complete 72 hours of continuing education to be reported every three years as to retain your enrolled agent status. If you are part of the NAEA, you must complete 30 hours per year. However, so long as you retain your license, you can represent taxpayers before the IRS. There are plenty of employment opportunities for licensed enrolled agents, so check out CareerBuilder.com and find the perfect job opportunity in your area.
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