Enrolled Agent (EA)
A federally authorized tax specialist that provides advisory services to American taxpayers
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What is an Enrolled Agent (EA)?
An enrolled agent (or EA) is a federally authorized tax specialist that operates to provide advisory services to American taxpayers about matters concerning the Internal Revenue Service (IRS). Achieving “EA” status is considered the highest credential awarded by the IRS and is legally recognized throughout all 50 U.S states.
As for occupational duties, enrolled agents are empowered to represent American taxpayers before the IRS on matters such as collections, tax appeals, audits, and any other tax issues.
Under existing statutes, EAs are able to provide advisory services and prepare tax returns for anything that is required to report under the IRS. They include entities such as individual taxpayers, corporations, trusts, and estates.
Enrolled Agents (EA) vs. Certified Public Accountants (CPA)
During tax season, services are offered by both EAs and CPAs, making selection increasingly difficult.
Discussed below are the primary differences between EAs and CPAs, which should provide a better understanding of which professional is most suitable for the work required.
EA Education: In order to become an EA, individuals must pass a three-part examination that covers individual and business tax standards and laws. EAs primarily focus on tax preparation and do not spend much time studying the accounting principles that CPAs do.
CPA Education: In order to become a CPA, individuals must complete university studies in accounting, meet practical experience requirements, and pass a four-part Certified Public Accounting exam.
EA Rate: On average, the hourly rate charged by an EA fluctuates from about $12 to $50 per hour.
CPA Rate: On average, the hourly rate of a CPA ranges largely from about $30 to $500 and is exclusively based on the amount of experience that the CPA holds.
EA Population: The National Association of Enrolled Agents states that approximately 10,000 EAs are currently practicing in the United States.
CPA Population: According to the national databases of CPAs, there are approximately 650,000 CPAs who are currently practicing in the United States.
In the most basic sense, EAs focus on tax and professional services while CPAs focus on the generalized accounting principles and standards that are present throughout the United States.
Apart from occupational requirements, CPAs generally charge a much higher rate than EAs, and there are more CPAs in the United States than EAs.
Steps to Become an Enrolled Agent (EA)
If an individual wants to become an enrolled agent, there are several requirements that must be met in order to gain that title. Discussed below are the steps needed to be taken in order to achieve the EA title.
1) Create an IRS Account: Go to the IRS’s website and register for an IRS account.
2) Submit IRS Application: In order to submit an IRS application, an individual will be required to present information such as name, address, date of birth, and any outstanding convictions or tax obligations.
3) Acquire PTIN Online: If an individual is not seen to have any outstanding convictions or tax obligations, they will be awarded a Personal Tax Identification Number (PTIN) immediately after application submission.
4) Register for a Special Enrollment Exam (SEE) Prep: Before rushing into the test, it is recommended that individuals register for an SEE course that provides education for the three parts present on the SEE exam.
5) 5) Register and Pass the SEE Exam: Once ready, individuals must register for their SEE exam, which consists of three major parts: individuals; businesses; and representation, practice, and procedures.
6) Gain IRS Experience: Once the test is passed, it is a requirement that all EA exam-certified individuals gain five years of experience working for the IRS.
7) Apply for Enrollment: After the experience requirement is met, individuals must apply for enrollment in order to finalize the certification. Applying for enrollment consists of background checks, training, licenses, employment experiences, and education history.
8) Continuing Education: Once the EA designation is awarded, individuals must maintain their title by meeting several conditions.
Individuals with EA designations are required to earn 72 CPE hours every three years, use an IRS-approved continuing education provider, and review the enrolled agent CPE credit chart.
The EA designation is a highly regarded title. As such, occupational opportunities are unlimited.
Benefits of Becoming an Enrolled Agent (EA)
Becoming an EA is a long and grueling process, but obtaining the designation provides many benefits, such as:
- Competitive wages
- Job security
- An increasingly growing job market
- Good standing with the IRS
- Does not require a degree
- Unlimited representational rights
Additional Resources
CFI offers the Certified Banking & Credit Analyst (CBCA)® certification program for those looking to take their careers to the next level. To keep learning and developing your knowledge base, please explore the additional relevant resources below:
