Why Become An Enrolled Agent

What is an Enrolled Agent?

An Enrolled Agent (EA) is a Federally Authorized Tax Practitioner who has technical expertise in the field of taxation and who is empowered by the United States Department of the Treasury to represent taxpayers before all administrative levels of the Internal Revenue Service for audits, collections, and appeals. The designation is acquired by passing a three-part exam covering all aspects of federal taxation. Unlike CPAs, who may or may not provide tax services, Enrolled Agents specialize in taxation..

Benefits of Becoming an Enrolled Agent

The Enrolled Agent status prepares the EA to advise, represent, and  prepare tax returns for a variety of clients.  The status identifies these individuals to the client as specialists and insures the client that the EA has kept up to date on the latest tax law changes.  This brings more business and more income to the practitioner.

The right to represent taxpayers before the IRS is given only to selected groups of individuals. Attorneys, Certified Public Accountants, Enrolled Actuaries, and Enrolled Agents are the only groups recognized to practice before the IRS.  Out of that group, the Enrolled Agent is the only individual who is required to take the test to achieve the status.  The others are granted the right of representation through their state credentials.

An individual who prepares a return can represent the client for whom the return has been prepared, but only before the examination division.  The unenrolled preparer cannot represent the client before the collections division. This limits what the preparer can do for the client and does not allow the preparer to perform the same function for potential clients.

The Enrolled Agent designation is a recognized symbol of expertise in the area of taxation. Tax professionals who have this designation generally receive greater compensation for their services in exchange for greater expertise.

How to Become an Enrolled Agent

Treasury Department Circular 230 contains the rules of practice before the IRS and authorizes the Director of Practice to grant enrollment to any person:

1. Whose conduct would not justify suspension or disbarment under the provisions of Circular 230, and
2. Who is technically competent in tax matters as demonstrated by:
   
   • passing the IRS Special Enrollment Examination (SEE), or
   • having a minimum of 5 years of continuous employment with the IRS during which the person regularly engaged in applying and interpreting provisions of the Internal Revenue Code and the regulations thereunder relating to income, estate, gift, employment or excise taxes.

The IRS Special Enrollment Examination (SEE) is a computerized test administered throughout most of the year in cities around the country.  The examination consists of three separate areas.  Part I covers individual tax issues.  Part II addresses Sole Proprietorships and Partnerships, Corporations, Fiduciaries, Estate and Gift Tax and Trusts. Part III tests knowledge of regulations and procedures for representing taxpayers before the IRS. 

To register for any or all sections of the SEE, visting the Thomson Prometric web site at:  http://www.prometric.com/IRS/default.htm.  The current exam fee is $97 for each section of the exam.

Once the test is successfully completed, the preparer must apply to the IRS for acceptance. 

How should I prepare for the SEE?

The Treasury Department does not specify educational requirements. The National Association of Enrolled Agents (NAEA), however, recommends a bachelor’s degree in accounting with an emphasis on tax courses.

In addition to attaining the recommended educational background outlined above, NAEA recommends that you attend a Special Enrollment Examination Review Course. These courses are offered throughout the United States by NAEA State Affiliates. To obtain information on a review course near you, call NAEA at 301-212-9608. Alternatively, NAEA offers a SEE Prep Course at its National Tax Education Institute (NTEI).

Retaining the Status of Enrolled Agent

Once a preparer has attained the Enrolled Agent status, the learning continues.  A total of 72 hours of continuing education credit (CPE) is required over the three-year enrollment cycle, with not less than 16 CPEs in any one year.

An Enrolled Agent is governed under rules set forth by the IRS in Circular 230. These rules govern the advertising and solicitation of clients, the conduct of the preparer, and the procedures to follow regarding renewal or loss of status.