Does IRS care who's preparing taxes?
Yes. The IRS is increasing oversight of federal tax return preparers and laid out its general roadmap in Publication 4832, Return Preparer Review. The agency’s increased oversight is being phased in over several years and implemented through a variety of new regulations, which began with the requirement that paid tax return preparers obtain and use a preparer tax identification number (PTIN). IRS also requires some preparers of tax forms for individuals to demonstrate competency on returns they prepare and to take continuing professional education.
What is an enrolled agent?
An enrolled agent (EA) is a federally-authorized tax practitioner who has technical expertise in the field of taxation and who is empowered by the U.S. Department of the Treasury to represent taxpayers before all administrative levels—examination, collection, and appeals—of the Internal Revenue Service. In addition to taxpayer representation, enrolled agents often provide tax consultation services and prepare a wide range of federal and state tax returns.
For more detail on how enrolled agents are regulated, Circular 230 provides the rules of practice for enrolled agents, certified public accountants and tax attorneys. The Return Preparer Office (RPO) provides oversight to the enrolled agent profession, including the testing and renewal of enrolled agents.
How do I become an enrolled agent?
There are two ways to become an enrolled agent: 1) work for the IRS for five years in a position requiring the interpretation of the tax code; or 2) pass all three parts of the Special Enrollment Exam (SEE) and pass a background check.
What are the three parts of the SEE?
Part 1 covers Individuals, Part 2 covers Businesses, and Part 3 includes Representation, Practices and Procedures. A complete list of the topics covered under each part can be found on Prometric’s website in the Candidate Bulletin.
Where can I find information on becoming an enrolled agent?
The Becoming an Enrolled Agent section on this website contains detailed information about the testing process, resources available to candidates and even information about how to keep your license once you’ve earned it. Prometric, the company selected by IRS to administer the SEE, maintains a website where candidates can learn more about the SEE and register for the test.
Is there an educational or experience prerequisite to becoming an enrolled agent?
No. What counts is your knowledge of the tax code, which is proven by passing the SEE. Earning the enrolled agent license demonstrates your advanced knowledge of tax issues.
Does NAEA have a class to help me prepare to take the SEE?
Yes. NAEA offers an online prep class. The extremely popular online program has three sessions per year. You may take the parts in any order you wish, but only one part in any given session. As a student, you learn by completing study assignments and quizzes as well as by attending periodic conference calls. NAEA’s program provides a start and a finish date, with the expectation that students will take the SEE at the end of the course. NAEA mentors encourage students and help keep them on track. All mentors are experienced enrolled agents, as well as qualified and engaging instructors.
May I join NAEA before I take the SEE?
Yes, it’s a great idea. Non-enrolled preparers may join as Associates, which offers the same benefits and discounts with the exception of being listed as an enrolled agent. Associates cannot hold office or vote. Joining now provides access to the information which can help you achieve your goals and help build your career!
When and where is the test offered, and how much is it?
The SEE is offered ten months a year (every month except March and April). You’ll need to schedule your test in advance by contacting Prometric, which has over 300 sites in the US as well as a number in foreign locations. A list of test locations can be found on the top bar of the screen. Each part costs $109. Applicants will need a PTIN to schedule a test. Information on acquiring a PTIN is available on IRS’ website.
What types of questions are on the test?
The SEE is a multiple choice exam, and each question has four potential answers. The question styles may include direct questions, incomplete statements or “all of the following except” questions.
How is the test graded?
Prometric uses multiple versions of each test, and employs a scaled scoring process to ensure comparability between those versions. Each item in the exam is worth one point, and scaled scores are determined by calculating the number of questions answered correctly from the total number of questions in the examination and converting to a scale that ranges from 40 to 130. The IRS has set the scaled passing score at 105, which corresponds to a minimum level of knowledge deemed acceptable by those persons who will be practicing before the IRS.
I’ve heard that there are questions that don’t count on the test. Is this correct?
Yes. Your test may include some experimental questions that will not be scored. If present, they will be distributed throughout the examination and will not be identified as such. These are used to gather statistical information on the questions before they are added to the exam as scored items. These experimental questions are not counted for or against you in your final examination score.
What happens if I fail?
You’ll know as soon as you complete the test. A failing score is 104 or less, and the program will tell you your score only if you fail. Each part may be taken up to 4 times in any testing year.
What happens if I pass?
Celebrate! Your score will not be released to you, only that you passed. Once you pass one part, you have two years to pass the other two parts of the exam.
Once I’ve passed all three parts, what do I do?
Within one year of your final test, submit Form 23, Application for Enrollment, and an application fee directly to IRS. The IRS will take 60-90 days to process your application and conduct a background check, which will include your tax compliance as well as criminal background.
What do I need to do to keep my license, once I’ve earned it?
Enrolled agents renew on a staggered schedule, based on the last digit of the enrolled agent’s social security number. To be eligible for renewal for the enrollment cycle, an enrolled agent must complete 72 continuing education (CE) credit hours for the three year cycle, with a minimum of 16 CE per year. Two CE credit hours per year must be in ethics.
Members of the National Association of Enrolled Agents are required to earn 30 CE hours in each calendar year, including two hours of ethics. Members report their hours for the prior calendar year as they renew for the upcoming membership year. NAEA offers many opportunities for CE each year, both in-person and on-line.