How to Become An Enrolled Agent

Are you passionate about taxation laws and want to achieve great success in this field? Then consider becoming an Enrolled Agent. Wondering how to become one? In this blog, we have detailed what an enrolled agent entails. We have broken it down by outlining all the steps required to become an Enrolled Agent.

What is an Enrolled Agent?

An enrolled agent is essentially a Tax Advisor permitted by the U.S. Treasury Department to represent taxpayers before the IRS. This credential is granted only if an individual has demonstrated great expertise in U.S. tax law and has passed the strict three-part Special Enrollment Examination (SEE) (pass rate typically 70%-74%). Or has relevant work experience in U.S. tax law. In short, it’s no picnic!

Reasons to Become an Enrolled Agent

Yes, we said that it is no picnic! But no gain without pain, isn`t it? Although becoming an Enrolled Agent requires putting in hard work but is immensely rewarding. If you ask yourself, why should you become an Enrolled Agent, the following reasons will get you thinking.

1. Credential Recognition

An EA credential is the highest and the most recognized credential in the tax industry, awarded by the IRS. Having this credential to name offers you credibility and trustworthiness in the tax profession. It also showcases your commitment and dedication to the profession.

2. IRS Representation

An Enrolled Agent works without restrictions on which taxpayers they can represent, the tax matters that they can handle (audits, collections, appeals, etc.), and which IRS office they represent the client in basically acting as an advocate to their clients at times of challenging tax situations.

3. Career roles

Enrolled Agents have numerous career options to choose from. From tax planning, to tax preparation to representation before the IRS can all be handled by an Enrolled Agent. Moreover, they can also work in tax firms or the corporate tax department in an organization or even work independently as a Tax advisor.

4. Steady Demand

Businesses and individuals have tax-related matters constantly. Consequently, there is a consistent demand for tax professionals who can give expert advice and representation.

5. Professional Growth

Another reason to pursue an EA credential is because of the professional growth it offers owing to the IRS mandating Enrolled Agents to upskill continuously and keep abreast of the current tax rules and regulations, which consequently helps them to keep their skills sharp and their knowledge abreast of the current happenings in the industry.

How to Become an Enrolled Agent

Step 1: Become Eligible

If you’re eyeing the prestigious EA title, you need to check off two boxes. The first involves a five-year stint at the IRS where your work was around interpreting and applying those intricate tax laws — or an alternative route of acing the three-part Prometric-run enrolled agent exam (yes, the Special Enrollment Exam (SEE)) that tests your tax knowledge on behalf of the IRS.

Step 2: Acquiring PTIN – a Preparer Tax Identification Number.

Getting a Preparer Tax Identification Number (PTIN) is one of the crucial steps in preparing for the SEE, mandated for aspiring Enrolled Agents by the IRS, and thus able to prepare tax returns.

Step 3: Get ready for the SEE – Special Enrollment Examination.

The SEE examination consists of three parts covering the different aspects of federal taxation.

Section I focuses on Individual Income Taxation (Income, Deductions & Exemptions)
Section II covers partnership, corporation, and trust taxation.
Section III tests your understanding of IRS practices, procedures, and ethical responsibilities relating to tax representation.

To be ready for SEE, read extensively from various IRS publications, Enrolled Agents Books, and tax return instructions, and take sample exams to familiarize yourself with their format.

Step 4: Set sail on your journey toward the Special Enrollment Examination!

The fourth step involves registering for the Special Enrollment Exam. When you are assured of your preparation and confident enough, go ahead and register for the SEE via the IRS website. SEE, conducted by Prometric for the IRS, is held all year round at various test centers in the U.S. and overseas and the details regarding this can be found on the IRS website — make sure to schedule your examination date and place according to what is available.

Step 5: Passing the SEE.

There are three parts of the SEE, each containing 100 questions graded separately. To move forward to the next level, you are required to clear all three parts within two years. Each section can be attempted a maximum of four times in one examination session and credits can be retained for a duration of up to two years from the exam date. After successfully passing all three components of the SEE, an enrollment application is possible.

Step 6: Apply for Enrollment and Pay Enrollment Fee

Once you clear the SEE, the next step is to apply for enrollment by filing Form 23 (Application for Enrollment to Practice Before the IRS) coupled with the enrollment fee within one year of clearing the third part of the exam.

Step 7: Background Check

The IRS does what is known as a suitability check in which they make sure you are not disqualified from being an EA because of any felony convictions that might be related to taxation laws.

Step 8: Maintaining the EA title

With all the above steps you have earned the coveted EA title, however, that isn’t sufficient. Not just earning but maintaining the EA title is crucial. For that, you must undergo 72 hours of continuing education every three years (at least 16 hours per year). This keeps you updated on the latest tax laws and regulations and renews your PTIN every year.

Applicability of Enrolled Agents in India

The Enrolled Agent certification is specifically designed to understand the intricacies of US tax law. The credential is conferred by the IRS in the US, thus there are limited career opportunities related to EA certification within India. Here’s why:

The EA designation allows an individual to represent others before the IRS in matters related to US taxation including assisting with tax preparation and advising on US tax issues. Essentially, it’s all about US tax specifics and not about any other country’s tax laws.

Whereas, Indian tax laws are distinct and monitored by the Indian Income Tax Department, bearing no direct relation to the US tax system, hence, the expertise gained through EA certification may not apply to Indian tax laws and procedures.

Career Opportunites as an Enrolled Agent in India

While an Enrolled Agent course in India may offer limited opportunities within the Indian tax system, indirect Enrolled Agent jobs may be offered for someone who has an Enrolled Agent course.

Consulting Firms

International tax consulting firms support multinational companies and high-net-worth individuals with cross-border tax matters and these companies that operate in India highly value professionals well-versed in multiple tax systems, including the US tax code.

Corporate Tax Departments

Large organizations with international ties, particularly those with US ties, may require expertise in understanding the impact of US tax on their global operations. Professionals with EA certification can find tax planning and compliance roles within such organizations.

Educational Institutions

Vocational training centers and academic institutions offering professional courses require industry experts to teach and train on topics related to international taxation, including the US tax code, where EA-certified individuals are highly valued and thus opens the door for job opportunities.

Independent Advice

Nothing could be better than positioning yourself as an independent advisor specializing in advising Indian companies and individuals with investments and offices in the US and assisting them with US tax compliance and planning.

It is also important to note here that to land potential job offers, you will need to research the demand for US tax expertise in India, especially among multinational companies and companies dealing with international tax. Also, supplement your EA credential with other titles such as Chartered Accountant (CA) or Certified Public Accountant (CPA) qualification relevant to Indian tax law, is locally recognized and provides comprehensive coverage of Indian tax law.

Conclusion

If you are passionate about tax law and want to help people navigate the complexities of tax law, the next step to building a rewarding career in tax is to become an Enrolled Agent. This blog basically features a guide, and the steps and information rolled out herein will help you achieve the coveted EA title. Whether you are just starting in the tax field or want to take it to the next level by becoming an Enrolled Agent, your professional horizons will be significantly broadened.

FAQs

1. To become an EA, what educational qualifications do I require?

A: No prior qualifications are needed but graduates with fundamental accounting knowledge are eligible to apply, provided they demonstrate proficiency in the subject matter related to taxes and have a valid passport to generate the PTIN.

2. Which of the three parts of the Enrolled Agent Exam is the most difficult to achieve the required score on?

A: Most tax preparers specifically find the business portion of the Enrolled Agent exam the most difficult.

3. What is the average enrolled agent salary in India?

A: The average enrolled agent salary in India is 7-10 LPA. This is after considering the person’s experience, location, education level, and employment status.

4. How relevant is the Enrolled Agent course certificate in India?

A: Enrolled Agents are certified tax professionals recognized by the IRS in the US. But with the growing international tax compliance requirements, EAs have gained value and relevance in India too.

5. Is there any fee to take the Enrolled Agent exam?

A: Yes. You must pay the fee in effect at the time of your registration for the exam. The fee is for each section of the three-part enrolled agent exam. The details will be available on the website.

How to Become a (EA) Enrolled Agent?