If you would like to take your tax professional career to the next level, you need to become an Enrolled Agent. The Enrolled Agent credential is the highest that the IRS awards and an excellent way to boost your reputation as a tax preparer.
Like CPAs and attorneys, Enrolled Agents enjoy unlimited practice rights, and are unrestricted when it comes to type of tax issues, representing taxpayers, as well as the IRS offices they are allowed to represent claims before.
7 Steps to Become an Enrolled Agent
If you become an Enrolled Agent, you will expand your tax preparation knowledge and is a great way to set you apart in your industry. Here are the 7 steps you have to take before becoming an Enrolled Agent:
1. You Must Get/Have a Personal Tax Identification Number (PTIN)
Tax preparers that complete taxes for profit must first have an active PTIN. If you don’t have one currently, you need to visit the IRS website to register. For additional information regarding PTIN requirements, you need to check out the PTIN FAQs on the IRS website.
2. Study for the Special Enrollment Examination (SEE)
The IRS Enrolled Agent Examination is a 3-part, comprehensive test covering all aspects of federal taxation. The examination comprises of over 250 questions and requires serious study and preparation. The 3 parts of the examination include:
– Part 1 – Individuals
– Part 2 – Businesses
– Part 3 – Representation, Practices, & Procedures
3. Review in Preparation for the Examination
If you want to have the highest chance of passing the challenging examination successfully, you must undertake a comprehensive review of all parts of the examination. The best way you can prepare yourself besides studying on your own is enrolling in an Enrolled Agent Review Course.
The courses typically cover all the 3 parts of the examination in-depth and usually provide feedback on your progress besides practice tests that simulate the actual examination. A good review course should ideally cover all the 3 parts of the examination as outlined above.
4. Register for the Examination
Registration for the exam is done online where you can schedule all 3 parts. You are not obligated to take all 3 parts on the same day or even consecutively. You can take each part of the examination in any order you choose as long as you stay within the available testing window.
The only time constraint is that the exam date has to be scheduled within 1 year from the date of registration. After that, you will have a maximum of 2 years to complete and pass all 3 sections. If you don’t pass a section on your first attempt, you can re-take the section up to 4 times within 1 testing window.
5. Pay for the Examination
Each part of the examination costs $109 and you are required to pay this fee when scheduling your examination.
If you wish to reschedule your examination, it is possible to do that. You will be charged a $35 fee if you reschedule the examination within 5 to 29 days prior to the date of the examination. However, you won’t need to pay a rescheduling fee if you reschedule it more than 30 days in advance.
If you reschedule your examination less than 5 days prior to the date of the test, you are required to call to reschedule since it is not possible to do it online. You will also forfeit the entire initial fee and you will have to pay the full $109 fee again.
6. Take the Special Enrollment Examination
You can take the 3 parts of the examination in any order you wish. Each part of the examination has 100 questions that you must answer in 3½ hours. In total, you will be required to answer 300 questions over a period of 10½ hours to complete the entire examination.
All the questions on the examination will be multiple choice. You will be required to choose from 4 different answers. There are 3 different types of questions:
– Direct Question
– Incomplete Sentence
– All of the Following Except
If you find one of the formats more challenging when studying and reviewing in preparation for the examination, you need to spend more time to increase your chances of performing well on the examination.
You will know whether you passed or failed each part of the examination once you complete it. It is only when you do not pass that you will find out your exact score.
7. Update Personal Information
Once you have passed the examination, you can start adding your new credential to your LinkedIn profile, email signature, and even business cards. By this point, you have worked hard and proven your expertise in matters taxation. Let both your current and future clients know that you are highly qualified to represent them as an Enrolled Agent.
If you want to take your tax preparation career to the next level, you need to think about following the 7 steps above to become an Enrolled Agent. The Special Enrollment Examination might seem like a daunting task, but if you adequately prepare for it, your chances of passing it the first time will be dramatically increased. So, consider signing up for prep courses to set yourself up for success today.