For those specializing in tax, enrolled agent (EA) is a distinctive title that brings significant rewards. As an EA, you have seemingly endless opportunities to grow your career and, as a result, your bank account. So, if you’re thinking about pursuing the EA designation, then you can use this 10-step guide to learn everything you need to know to get started. The guide tells you how to become an EA and outlines each important decision and action along your journey.
Understandably, 10 steps can seem overwhelming. But these steps are in fact manageable. And I break them down in a way that makes them even more achievable:
And by following these steps, you can become an EA in just 6-12 months. So again, don’t let the number dissuade you.
Clearly, before you decide to become an EA, you must know more about the designation. For starters, let’s unpack the meaning of the term “enrolled agent.” In this case, “enrolled” means to be licensed to practice by the federal government. “Agent” means a person authorized to appear in the place of the taxpayer before the Internal Revenue Service (IRS).
Therefore, enrolled agents are federally-licensed tax practitioners who possess technical expertise in taxation. They have the express privilege to represent taxpayers before the IRS in matters relating to examinations, collections, audits, and appeals. EAs represent a wide range of clients including individuals, corporations, estates, partnerships, trusts, and more.
The U.S. Department of Treasury grants EAs unlimited representative rights before all administrative levels of the IRS. Therefore, the EA credential carries significance. Of course, this privilege comes after you meet the EA requirements and pass the EA exam.
Further, the only other professionals who hold such status before the IRS are Certified Public Accountants (CPAs) and attorneys. As such, all 50 states recognize the EA designation.
Now, the entire point of earning the EA license is to advance your career and help grow your paycheck. Specifically, the EA license enables you to benefit professionally in 3 ways:
For transparency, EAs don’t actually work for the IRS. They work for taxpayers. In fact, they have unlimited rights to represent taxpayers before the IRS. And this privilege sets them apart from other tax preparers. As mentioned, only CPAs and attorneys enjoy the same rights before the IRS.
The CPA is a type of license, and the EA is a credential. Yet, individual states grant the CPA, while the federal government grants the EA. Therefore, EAs and their tax expertise are acknowledged at a national level. EAs are known across the country as top-notch tax preparers. Clearly, EAs know their stuff. And, they can advise clients in matters that involve multiple states.
In the U.S., EAs, CPAs, and attorneys hold the same good standing before the IRS. But in the eyes of the public, EAs stand out for their tax expertise and their affordability.
To clarify, many CPAs choose not to pursue taxation work because of the nature of the job or their lack of experience in the tax realm. Further (and sometimes for this reason), CPAs typically charge more for their tax services.
Now, most people will need some type of tax help in their lives. And with CPAs placing a premium on their services, EAs are more likely to appeal to clients. EAs offer clients more reasonable pricing as well as advanced tax knowledge and practice.
At this point, the benefits of the EA designation may be enough to convince you to move ahead with the designation process. But before you do, you should take the time to assess the pros and cons of the EA designation and compare it to other professional accounting certifications. Then, choose the certification that’s the best fit for your interests and long-term goals.
For example, would the CPA be a better choice for you?
The CPA is a more widely-known certification. With it, you’re likely to have more job opportunities. Technically, CPAs also have more opportunities to increase their earning and bonus potential over time.
However, the CPA Exam is longer and more all-encompassing than the EA exam. You’ll also have to meet a more stringent set of requirements to earn the CPA. Therefore, you should learn more about the EA vs CPA so you can be completely sure of your designation path.
Obviously, you’ll have to spend some money to become an EA and maintain your designation. But the specific fees you’ll have to pay include:
|EA exam testing fee||$184.97 per part ($554.97 for 3 parts)|
|Enrolled agent review course materials||$170-$600 (average $385)|
|Enrollment to practice fee||$30|
|Exam Fees Total||$970|
|Maintenance and continuing education fees||$200-$300 a year|
|Maintenance Fees Total||$200-$300 a year|
Given this information, you must decide if you think the costs of the EA credential outweigh the benefits. And, as part of your decision making, you should also consider the opportunity cost of the designation. Meaning, you’ll have to spend time studying for the EA exam. This time could be many weeks or many months, depending on your starting point and availability to study. So, would preparing for the exam be too much to take on as you juggle your other roles and responsibilities?
The IRS offers 2 paths to earning the EA designation:
So, if you qualify for the second option, you can skip to the last step of the guide. The following content is just for those pursuing the first option, aka the EA exam.
Plainly speaking, the EA exam is the main hurdle to earning the designation. But good news: You don’t need any prior educational or professional experience to qualify for the SEE experience. If you’ve spent any time looking into other accounting or audit certifications, you’ll know this circumstance is rare among them.
Instead, all you need to take the exam is a Preparer Tax Identification Number (PTIN). And you can easily register online for yours.
As part of the PTIN application process, you’ll need to gather and provide the following information:
Once you complete and submit your application, your PTIN will be available online. While I recommend completing the registration process online, you can choose to fill out Form W-12 and mail it to the IRS. However, this method can take up to 6 weeks. And spending 6 weeks waiting for your PTIN can drastically cut into your overall timeline for earning the EA credential.
Also, your PTIN will expire at the end of each year. So, you must renew it by December 31 for use the following year. Typically, renewal open season begins in mid-October and thankfully, the process is quick, easy, and free.
With your PTIN, you’ll be eligible to take the EA exam. Fortunately, you don’t have to fill out any type of application. Instead, you’ll simply provide your PTIN when you go to schedule your exam appointment.
The EA exam has 3 parts:
You can take the exam parts in any order. To decide which order may be best for you, you should understand the content of each exam part. According to the EA exam syllabus, the 3 exam parts cover the following topics:
Representation, Practices, and Procedures
|1. Preliminary Work with Taxpayer Data – 17 questions||1. Business Entities – 28 questions||1. Practices and Procedures – 25 questions|
|2. Income and Assets – 21 questions||2. Business Financial Information – 39 questions||2. Representation before the IRS – 24 questions|
|3. Deductions and Credits – 21 questions||3. Specialized Returns and Taxpayers – 18 questions||3. Specific Types of Representation – 19 questions|
|4. Taxation and Advice – 14 questions||4. Completion of the Filing Process – 17 questions|
|5. Specialized Returns for Individuals – 12 questions|
Each part of the EA exam includes 100 multiple-choice questions (MCQs). However, the IRS doesn’t score all these questions. Instead, they only score 85 of the 100 MCQs. The other 15 MCQs are considered experimental and not counted in your score.
You’ll have 3.5 hours to take each exam part. As you think about when and how you’ll prepare for the exam, you should also know about the defined testing window. You can only take the EA exam between May 1 and February 28 of the following year.
You should start studying before you schedule your first exam date. Clearly, you want to position yourself for success. So, you need to become familiar with the exam content before you make the initial appointment. Then, when you feel ready, choose your exam date.
The best way to prepare for the exam is to use an enrolled agent course. An EA review course will help you develop and deepen your understanding of the exam material. Fortunately, you can choose from several popular and effective EA exam prep courses. Top choices include Gleim, FastForward, Lambers, etc. To find the best course for you, evaluate each option according to the following criteria:
Good news: Once you’ve found the right course, you can save on your purchase by using my enrolled agent course discounts.
An EA exam prep course is critical for helping you pass the exam on the first try. However, I also suggest creating a study schedule to keep you on track. With a study schedule, you’ll have a more accurate idea of when you’ll finish your exam prep and can make your testing appointment.
Your study schedule will help you better understand when you can sit for the EA exam. Basically, about 3 weeks before your study time is over, you should schedule your test appointment for the appropriate EA exam part.
Again, you don’t need to take the EA exam parts in any set order. You can start with the exam part that feels most familiar or interesting to you. Or, you can start with the exam part that you think is the most difficult and get it out of the way.
In any case, you shouldn’t study for the 3 exam parts at the same time. While taking all 3 parts at once is an option, it’s not the best strategy for passing because it can get overwhelming and may increase your odds of failing an exam part. Therefore, you should simply focus on one exam part at a time instead.
Prometric administers the EA exam. So, you’ll need to make an appointment with a Prometric testing center by following these steps:
Also, you can choose to fax or mail your Prometric registration. However, you can only register for the exam and schedule your appointment on the same day if you use the online method.
Now that you’ve registered with Prometric, you must decide when and where you’d like to take the exam. Prometric has hundreds of testing sites around the world.
Follow these steps to choose your exam date and location:
Once you’ve passed the EA exam, you need to officially apply for enrollment. And in the process, you must pay attention to the deadlines associated with the application component. Specifically, you must apply for enrollment within 1 year of passing the 3 exam parts.
To apply, you’ll fill out and submit Form 23. You must also pay a $30 fee to the IRS. You can expect to hear back on your application in 60 days.
Now, if you don’t have to take the exam and are able to use your previous IRS work experience, then the application process will look a little different. In this case, you’ll need to submit additional information to the IRS about your education, training, certifications, and work experience. You’ll also have to wait longer to finish the application process, as the review for former IRS employees can take roughly 3 months. But be prepared, as it can take even longer.
No matter which route you take to the EA designation, your path will include a background check. So, if you know of some issues on your record that may raise a red flag, be proactive and share that information with the IRS. You can do this by listing the details of your issue in a disclosure statement. Then, submit the statement along with your application. Specifically, explain how the problem originated, how it was corrected, and why it won’t happen again.
Also, make sure you don’t have overdue tax charges before applying!
At this point, you should be feeling proud (and maybe a little relieved) to be an EA. Enjoy your accomplishment!
But now you’ll have to put in some work to maintain your enrolled agent status. In other words, you’ll have to meet the continuing education (CE) requirements.
In short, you must complete 72 hours of CE every 3 years. And you can’t postpone all of those hours until the last year. Instead, you need to fulfill 16 hours of CE each year. And, at least 2 of your 16 annual hours must focus on an ethics-related topic.
Yes, the process of becoming an EA can seem complicated. But once you take the initial step, you’ll quickly learn that the process is more than doable.
And if you’re ready to jump into the EA designation process, then sign up for my free EA materials as well.
I am the author of How to Pass The CPA Exam (published by Wiley), and I also passed all 4 sections of the CPA Exam on my first try. Additionally, I have led webinars, such as for the Institute of Management Accountants, authored featured articles on websites like Going Concern and AccountingWeb, and I'm also the CFO for the charity New Sight. Finally, I have created other accounting certification websites to help mentor non-CPA candidates. I have already mentored thousands of CPA, CMA, CIA, EA, and CFA candidates, and I can help you too!