If you’re interested in becoming a tax expert, Enrolled Agent (EA) is the right path to take. EAs are licensed tax practitioners who specialize in taxation and represent tax payers before the IRS. To become one, you must clear an enrolled agent exam. This exam covers all aspects of tax code and everything related to taxation.
Following is an enrolled agent exam review that will help those looking to enter this field:
How to Become an Enrolled Agent?
In case this is your first time with Enrolled Agent examinations, here are a few steps you will need to follow:
Step 1: Obtain a Preparer Tax Identification Number
Step 2: Apply to take the Enrolled Agent Exam
Step 3: Get passing scores on all three parts of the Enrolled Agent Exam
Step 4: Apply for enrollment
Step 5: Clear a tax compliance check to make sure you have no outstanding tax liabilities
Note: Certain IRS employees may not need to take the exam, because of their past technical experience. Check the IRS official website for details
Format of an Enrolled Agent Exam
The EA exam is divided into three main sections. The questions are mainly targeted at tasks that enrolled agents need to perform to represent taxpayers before the Internal Revenue Service. The subject matter includes various aspects of federal taxation, tax return forms for individuals, corporations, partnerships, trust funds, estates and so on. The type of questions on the exam is mainly multiple choice. Each question has four potential answer choices. The question style may be direct questions, incomplete statements and “all of the following except”.
An enrolled agent study guide would typically help you prepare for these three parts of the exam:
Part 1 – Individuals
Section 1: Preliminary Work and Taxpayer Data
Section 2: Income and Assets
Section 3: Deductions and Credits
Section 4: Taxation and Advice
Section 5: Specialized Returns for Individuals
Part 2: Business
Section 1: Business Entities
Section 2: Business Financial Information
Section 3: Specialized Returns and Taxpayers
Part 3: Representation, Practices and Procedures
Section 1: Practices and Procedures
Section 2: Representation before the IRS
Section 3: Specific Types of Representation
Section 4: Completion of the Filing Process
When and Where to take the Enrolled Agent Exam?
The exam will be available from May 1, 2017, all through the year till February 28, 2018 (except for the blackout period of March and April). Most testing locations are open on Saturdays, while some are also open on Sundays and evenings. The exam is administered at Prometric Testing Centers located in major metropolitan areas.
How much does an Enrolled Agent Exam cost?
The cost of this exam incorporates the following factors:
PTIN Application/Renewal Fee: $50.00
Exam Scheduling Fee: $109.00 for each part
Enrollment to Practice before the IRS Application Fee: $30.00
In addition to these, your cost will increase if you invest in the highly recommended enrolled agent study guides or enrolled agent exam study materials.
Enrolled Agents – Continuing Education
After becoming an enrolled agent, you will need to keep your education and knowledge in tax matters updated. As rules and regulations relating to taxation are updated every year, continuing education becomes an important aspect for EAs. Generally, Enrolled Agents need to get a minimum of 72 hours for every enrollment cycle, which lasts three years. In addition, you will also need to obtain at least 16 hours of continuing education (which includes 2 hours of ethics or professional conduct) for every enrollment year. The IRS requires EAs to renew their enrollment status every 3 years. You will need to fill out the Form 8554, available on the IRS website and pay $30 as renewal fee. You can check the IRS website for detailed information on continuing education requirements for enrolled agents.
Education and Experience Requirements for Enrolled Agents
Even though there is no formal requirement in terms of education and experience for Enrolled Agents, it is necessary for you to have updated knowledge on the tax code. Earning an enrolled agent license will help you demonstrate your advanced knowledge of tax related issues.
The Length of the Online Course
Part 1 of the EA course is a six-week program. Part 2 is an eight week course while Part three is a four week course. There are no specific hours for the online program. You will have 24/7 access, which will help you manage your schedule. The online program caters mainly to professionals who have at least 3-5 years of experience. Ideally you should dedicate 20 hours every week to studying for the Enrolled Agent Exam. Students who have less than the recommended amount of experience will need to put in more study hours to be able to learn and understand the enrolled agent exam study materials.