The business world keeps evolving every working day. Market trends and income-generating opportunities keep coming, which allows brave entrepreneurs to start-up businesses. As a ripple effect, the demand for the taxation workforce arises as well.
So during these business-minded days, being an Enrolled Agent might be the next sought after career-elevating opportunity you wouldn’t surely want to miss.
Now, one particular question would start bugging you: How do I become an Enrolled Agent? Before getting to the salient point of the matter, have at least a decent working knowledge about the history of this profession as well as its advantages to achieve professional advancement.
The profession known today as Enrolled Agents who specializes in tax services started more than a hundred years ago. During the civil war, people had representatives to go to the US government to report property damage for reimbursement and financial aid.
The government started to authorize representatives flocking them for payment that’s why the job of representing came to essence as a way to control representatives reporting dubious casualties incurred.
During the early 1900s, the income tax became law. Citizens had to look for representatives to appeal their inequitable tax before the state. When the collections for the tax of the citizens, grew and the tax laws became more complex, the role of these representatives evolved.
Hence, representation services had been regulated by the national government, and these representatives are known today as Enrolled Agents.
Modern Day Agents
Credentialed Agents nowadays still represent taxpayers before the government through the Internal Revenue Service. They are known as tax preparers and tax return representatives on behalf of taxpayers.
But before they could practice the service of representing, they go through the tedious process of special enrollment. Thus, Enrolled Agents are tax experts who have been qualified by the federal government either passing the special enrollment exam (enrolled agent exam) or by virtue of a 5-year technical experience under the Internal Revenue Service.
Practical Reasons to aspire for the EA status
There are definite advantages in choosing to be an agent. You may find a sound one in the following:
- OPEN for all courses – in taking the special enrollment exam, and there is no definite educational background required. Related courses are accepted to be admitted for the test
- FREELANCE work privilege – when you become a certified agent, you can work for multiple business entities and individuals to represent them and give you maximum potential earnings.
- ALWAYS in-demand – tax representation is a constant demand for the business world.
- PRESTIGE status – you have an equal opportunity with certified accountants and attorneys who can limitlessly represent taxpayers in the IRS and earn the reputation of being a tax expert or tax preparer
Understanding these advantages and how they can work for you will be a good reason for you to take the road to attain the elite designation.
After getting impressed with the potential privileges you can enjoy from the special distinction, it is now the best time for you to know the process of the special enrollment.
Road to the EA Status
To become a full-fledged tax agent, the two possible ways to get the elite status are through passing the Special Enrollment Examination (SEE) or having 5-year work experience in the IRS.
The second option is only for those who have experienced working for the IRS. Those who aspire to get the status without the IRS experience must pass the Special Enrollment Examination.
So here are the steps to enroll in the special examination:
- Go to the IRS website to sign up the application form online.
- Secure a Preparer Tax Identification Number (PTIN)
- Book your preferred schedule of examination.
If you are one of the few who have worked for IRS for at least five years, you can leverage your experience to apply for the EA status by merely submitting the enrollment form (known as Form 23) and attending a background check session under the IRS.
Maintaining the Status
Since EAs hold a distinction as good as the CPAs’, they also need to renew their certification.
As mandated, all professionals renew their license every three years to keep abreast of the taxation principles and modern approaches to taxation.
To be able to renew, an agent must render 72 hours of Continuing Education. It may be in the form of taking graduate studies, attending seminars regulated by the federal government, and other related endeavors. Apart from the Continuing Education requirement, 2 hours of Ethics education must also be rendered every year.
Before this segment, you’ve been informed about the benefits of becoming an Enrolled Agent, and those might have convinced you to be one already.
But before plunging into the heart of the matter and decide to take the road to enrollment, you need to consider your background to weigh if this is the best career move for you.
For instance, given your educational attainment and work experience (if any), is it best for you to become an agent or your credentials match that of a public accountant?
As we all know, the CPA is a more prestigious distinction compared to an Enrolled Agent. In terms of potential income, CPA is also an excellent choice to maximize your earnings (enrolled agent salary).
The only thing that might hamper you from choosing CPA than EA is the way to get the certification. The CPA exam is more tedious and comprehensive than the SEE.
EA, go all the way! After taking some time weighing your options, becoming an Enrolled Agent, after all, is not as easy as it seems. While taking the special exam for agents is relatively more comfortable than the public accountant test, you also have to invest a lot in preparing for the SEE, if you decide to be an Enrolled Agent without the 5-year IRS work experience.
Just like school exams, reviewing is a prerequisite to taking the SEE. Ample preparation, including your time and money, are of top consideration once you start to commit to study and take the review classes. Confidence in taking the first step, and the entire process means you are halfway to achieving your goal. As Maya Angelou put it, courage is the most important among all virtues as you can’t practice any other virtue consistently without courage.
Leap courage, and start your way to become an Enrolled Agent!