Since the EA license holds federal recognition, requirements do not vary by state. Current tax preparers and accountants may find themselves well equipped to pass the qualifying exam and become enrolled agents. An enrolled agent must take and pass the IRS Special Enrollment Examination (SEE), although a college degree isn’t necessary. The exam is eight hours over two days, and it covers all aspects of federal tax law, including taxation of individuals, corporations, and partnerships. It includes various regulations governing IRS collections and audit procedures. The enrolled agent credential isn’t a certification, although it’s often referred to as such by many practitioners, including the National Association of Enrolled Agents (NAEA).

An enrolled agent is the only type of tax professional who has this type of relationship with the IRS. Enrolled agents advise, represent, and prepare tax returns for individuals, partnerships, corporations, estates, trusts, and any entities with tax-reporting requirements. Enrolled Agents’ expertise in the continually changing field of taxation enables them to effectively represent taxpayers at all administrative levels within the IRS.

What Is Needed to Maintain EA Accounting Certification?

EAs can handle virtually any situation that may arise in the case of a taxpayer. To maintain their active enrolled agent license and practice rights, enrolled agents must complete 72 hours of continuing education every three years, https://www.bookstime.com/ with a minimum of 16 credits each year. As income, estate, gift and other sources of tax collections became more complex, the role of the Enrolled Agent increased to include the preparation of the many tax forms that were required.

A person may be an EA and a CPA; however, one appointment does not necessarily qualify the person to serve as the other. CPAs’ duties and professional offerings are broader than an EA’s. Avoid hiring someone who bases their fee on a percentage of your income tax refund—most licensed, professional tax preparers will never bill you this way. Also make sure that they e-file, since the IRS requires that preparers who do taxes for more than 10 clients must file electronically.

What are Enrolled Agents?

In the event of an IRS letter or IRS examination, an enrolled agent can also represent tax clients before any type of IRS office. Nobody knows your finances better than you do…unless, of course, it’s the IRS. Choosing a licensed tax preparer-who, by virtue of competency testing and mandatory continuing education, has technical expertise in the field of taxation and who is empowered by the U.S.

• If you think you’ve been scammed, consult this guide and use Form A to file your complaint with the IRS.
• Evolving tax legislation Opens in new window and the recent push from lawmakers to require certification puts unenrolled tax preparers at a disadvantage.
• In the 1880s, there were inadequate attorney standards, and Ccertified public accountants (CPAs) were not in existence.
• You may use a single EA to submit tax returns in multiple states.

One of the major differences between an EA and other tax professionals is the certification process. One is to work for the IRS in a position that requires you to interpret the tax code. The other is to pass the Special Enrollment Exam (SEE) and a background check.

Enrolled agent

The Enrolled Agent license is the highest credential the IRS issues. Tax-related issues can be handled by an enrolled agent because they are not only familiar with the law, but also know how to deal with the unique circumstances. An enrolled agent is familiar with Federal tax law, IRS regulations, and specific situations that pertain to taxpayers and, more importantly, how to achieve the best, most cost-effective result for you.

To become an enrolled agent, you must work at the IRS for a minimum of five years. You can also earn EA status by passing all parts of a test called the Special Enrollment Exam (SEE). To maintain EA status, you must complete 72 hours of continuing education every three years. Another major difference is the unlimited practices that an EA has. EAs can represent anyone on any matter relating to taxation, collection or appeals.

Requirements for Enrolled Agents

Doing your taxes isn’t always easy, especially if you’re a freelancer or a small business owner with specific tax needs. An enrolled agent can help you navigate the tax code, make sure you’re filing your taxes properly, and remove a huge layer of stress from your tax season. If you want to learn more about enrolled agents and our services and how we can contribute to the success of your business, we should talk! Maybe you’ve heard it used in passing but you’re not entirely clear on what it means.

NAEA members must complete 30 hours of IRS-approved continuing education hours each year (which would lead to a total of 90 hours for each three-year EA enrollment cycle period). Because of the expertise necessary to https://www.bookstime.com/what-is-an-enrolled-agent become an enrolled agent and the requirements to maintain the license, there are only about 53,700 practicing enrolled agents. Former IRS employees with at least 5 years of experience as field tax professionals.

What are the differences between Enrolled Agents and other tax professionals?

You may have unlimited flexibility, but you’ll have to earn clients to make money. You can have uncapped earning potential when you do this well, but you could also feel the stress of juggling too many clients. You may also incorporate bookkeeping services into your practice or start a small business with a partner. By partnering with someone who does advising and accounting work, you can start a well-rounded accounting practice.

You can also check your local yellow pages or a local business directory like Yelp. You can also find some financial advisors who are enrolled agents. And while you’re at it, now is a good time to set up your files for next filing season while the categories that pertain to your unique tax situation are still fresh in your mind. We all know that good feeling of putting on a coat we haven’t worn in a few months, putting our hand in the pocket and pulling out a dollar or two we’d forgotten about. Our team of reviewers are established professionals with decades of experience in areas of personal finance and hold many advanced degrees and certifications. EAs may charge less than CPAs for their services, but EAs’ expertise in taxation is often difficult to match.

Exam Outline and Associated Cost

To gain EA credentials, individuals must meet a series of requirements. First, candidates must obtain a Preparer Tax Identification Number (PTIN) and meet a suitability check. Next, they must pass a comprehensive three-part test called the Special Enrollment Examination that covers individual and business laws and representation issues. At a public accounting firm, EAs can work as tax staff, helping to prepare returns and representing clients before the IRS. EAs will likely work with a variety of clients, from individuals to corporations, and will get highly experienced guidance on tax related matters.

Consider the continuing education and ethical requirements if you choose someone from a directory. A person’s enrolled agent status can also be verified directly with the IRS. An unfiled tax return can result in steep IRS penalties and interest.