For the past 4 weeks or so I have been going live each week on LinkedIn and Facebook to give insight into being an Enrolled Agent. Before this, I have had many tax professionals interested in pursuing the credential reach out to me. This number has almost doubled since I started going live each week. I've covered what an Enrolled Agent is on my blog and podcast.
But today I want to break down how to become one.
If you're interested in checking out the article, podcast episode, or YouTube video you can do so using the following links:
In short, an Enrolled Agent is someone who has unlimited practice rights before the IRS. As an Enrolled Agent, I have no restrictions as to which taxpayers I can represent, tax matters I can handle, and which IRS office I can represent clients in.
This article is also a pre-requisite for those who aren't Enrolled Agents but will be joining me this Tuesday. I'll be covering how to become an Enrolled Agent after you have become an Enrolled Agent. I'll show you how to step into your authority when representing taxpayers.
For now, first things first. How do you become an Enrolled Agent?
Let's look at it in 3 steps:
The Test requirements to become an Enrolled Agent
Applying for Enrollment
The Pre-Requisites to Become an Enrolled Agent
The first thing tax professionals ask me about is the education requirements. The education requirements to become an Enrolled Agent are actually less than to become a CPA. Only a high school diploma and demonstrating special competence in tax matters. Individuals show this special competence in tax knowledge by passing the special enrollment exam. We will take a look at that in the next section.
If an individual has a high school diploma the next thing they need to do is obtain a preparer tax identification number (PTIN). A PTIN is similar to a social security number but for taxpayers. It is an electronic signature for tax professionals. The IRS requires that the PTIN is on every tax form that a professional prepares for pay. The IRS also allows taxpayers to find tax professionals in the PTIN directory.
The IRS uses this to track the returns that a preparer does as well as continuing education. To obtain this identification number you will have to follow these four steps:
Create an account - individuals will do this on the IRS website.
Apply for a PTIN - you will need personal information, prior year tax returns, professional credentials, and a bit more.
Pay your fee - the application fee is $30.75 and you can pay online.
Get your PTIN - the IRS will provide your PTIN online.
All correspondence pertaining to your PTIN comes through a secure online system on the IRS website.
After you have your PTIN you can apply to sit for the special enrollment exam (SEE) to become an Enrolled Agent.
The test requirements to become an Enrolled Agent
Remember when I mentioned a special competence of tax knowledge? The way one demonstrates this is by passing the SEE, also known as the EA exam. There are 3 parts of the exam, testing a tax professional's competency in:
Individual Taxation
Business Taxation
Tax Representation, Practices, and Procedures
A tax professional must pass all 3 parts of the exam within 3 years. Tax professionals have to schedule their tests through Prometric and may take them at a Prometric testing site. Prometric allows 3 1/2 hours to take the exam. The testing block is 4 hours to allow for pre-exam tutorials. A tax professional can schedule their exam by calling 1-800-306-3926 or online at www.prometric.com/see . There is also a $206 fee for each part of the exam.
Once a person passes the exam they must apply for enrollment and pass a suitability check.
Applying for Enrollment
Tax professionals can apply for enrollment by filling out Form 23, Application for Enrollment to Practice Before the Internal Revenue Service. A fee is also due with this application. Tax professionals applying for enrollment can pay the fee at Pay.gov Form 23.
While the IRS is processing the application the tax professional must also pass a suitability check. This check includes having fingerprints submitted and a background check. The tax professional must also be in tax compliance. This means that all taxes to date have been filed. If there is a tax debt owed there must be an arrangement in place to settle it. I cover this in Episode 10 of Tax Relief with Timalyn Bowens, Installment Agreements.
Certain IRS employees are exempt from these testing requirements. The IRS lets them become an Enrolled Agent due to their technical on-the-job experience.
Summary
The process to become an Enrolled Agent is not difficult. But it can be time-consuming. If you are interested in pursuing this designation but don't know where to start with getting clients, doing the work, or building your practice the Tax Pro's Representation Journey may be the place for you.
This private weekly podcast and article subscription provides guidance for how to reach your goals. The homework also helps you implement steps to move toward those goals. You'll also have me and a community of other tax professionals to cheer you on along the way.
If you're interested check out the subscription here: The Tax Pro's Representation Journey.
Timalyn S. Bowens EA is America's Favorite EA and Tax Expert who will work hard to find a customized legal solution for you! As an Enrolled Agent licensed through the Internal Revenue Service Timalyn is able to fight the IRS for taxpayers in all 50 states. As the host of Tax Relief with Timalyn Bowens and a YouTube content creator she empowers taxpayers to make educated decisions about their tax situation.
When you are facing questions regarding your personal or business taxes, working with a professional makes all the difference. At Bowens Tax Solutions, we serve our Louisville-area neighbors by providing the tax services and knowledge needed to succeed. We are here to assist you with your tax issues and preventative care. Visit our website at www.bowenstaxsolutions.com for more information.
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