Enrolled Agents Internal Revenue Service

what is an enrolled agent

Enrolled Agents work for tax preparation firms, or as self-employed business owners. Enrolled Agents are federally recognized and can serve any client in any state. They focus solely on taxes, and with their federal licensure, can work anywhere, with unlimited practice rights. The NAEA is the nation’s leading community for tax practitioners – from aspiring https://www.bookstime.com/ enrolled agents to experts with decades of experience. We are advancing the professional tax practice through leadership, management, community, and ethics. The hiring of tax examiners is projected to decline 4% from 2020 to 2030 as the growth of the tax examiner industry is closely tied to changes in federal, state, and local government budgets.

All enrolled agents must complete 72 hours of continuing education every 36 months. CPAs and attorneys may serve as enrolled agents without taking the exam. The IRS Restructuring and Reform Act of 1998 provides federally-authorized practitioners (those bound by the Department of Treasury’s Circular 230 regulations) with a limited client privilege. This privilege allows confidentiality between the taxpayer and the enrolled agent under certain conditions. The privilege applies to situations in which the taxpayer is being represented in cases involving audits and collection matters.

How Do I Become An Enrolled Agent?

Certified public accountants do generally have more job opportunities due to the fact that they can work for private individuals, in the private sector, or for the government. With thousands of NAEA members across the country, we’ve made it easy to find the tax expert who can help you with any and every question, issue, or challenge you may face. You can rest assured that our tax pros won’t stop until you receive every credit and deduction available to you, so you get your maximum refund.Disclaimer number84.

what is an enrolled agent

Find out what adjustments and deductions are available and whether you qualify. 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. Assuming you don’t already have an accounting or law degree, however, I’d highly encourage you to register for the Special Enrollment Exam (SEE). Such a quick turnaround time is a luxury compared to other exams like the CPA, CMA, and CIA. For these exams, you must wait until the next testing window to repeat a section.

CPA vs. EA

An enrolled agent usually works on a year-round basis helping clients. As part of an EA’s job responsibilities, he or she often develops a strategy for handling matters with the IRS. In this capacity, enrolled agents work to reach satisfactory agreements regarding plans, payments, estimations, and settlements. Due to the fact that this type of work can be quite complex, the job of an EA is often in high demand. When deciding between working with an EA or a CPA, you can rest assured that both types of professionals are well-trained. They must pass rigorous exams and can do difficult and demanding work for clients.

To understand what differs in the role of EAs vs. CPAs, let’s first review how each is licensed. An enrolled agent is a tax practitioner who is licensed at the federal level by the Internal Revenue Service. In fact, enrolled agent status is the highest credential awarded by the IRS. On the other hand, certified public accountants are licensed by their applicable state boards of accountancy.

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For example, if you are not super familiar with the current tax code, getting ready to pass all 3 parts may take you a few hundred hours. Programs/courses must be completed by midnight local time of the student on December 31 to count for credit in the current calendar year. If you are the only instructor for a program, you may only earn instructor hours (maximum of 6 credit hours annually). Any programs you’ve taken from an IRS-approved CE Provider will be reported to the IRS by the Provider.

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Continuing education requirements for CPAs can also vary by state. An IRS enrolled agent typically represents a client during IRS hearings or when dealing with legal tax matters. In addition to the enrolled agent job title, these duties also extend to licensed attorneys and Certified Public Accountants or CPA’s.

Accordingly, CPAs don’t usually have the same amount of passion for keeping up with and performing tax services. So, with the EA license, you’ll be known as the most committed and qualified tax professional. Then, when CPAs decline opportunities to provide tax assistance, you can swoop in and deliver the help clients need. You may hear some enrolled agents boast that the EA exam is easy and that they passed it in just a few weeks.

  • The Enrolled Agent exam allows candidates to take 10 out of the 12 months in a year.
  • As a general rule, preparers should not repeat a program within the same enrollment cycle, if you’re an enrolled agent, or AFSP program year.
  • SmartAsset does not review the ongoing performance of any RIA/IAR, participate in the management of any user’s account by an RIA/IAR or provide advice regarding specific investments.
  • There are also only three parts – individuals, businesses, and representation/procedures.
  • You can also verify an enrolled agent’s status directly with the IRS.
  • Due to the month and year that you enrolled, you are required to complete 44 CE credits before December 31, 2022.

An EA can prepare your tax return for you as well as advise you on any tax-related concerns. Furthermore, if you need to deal with the IRS in any capacity – for instance, in an audit – an EA can represent you, providing you with the expertise you wouldn’t otherwise have. what is an enrolled agent So there you have, it my list of reasons that all return preparers should become an EA. For these two reasons alone, I believe that every unenrolled preparer should either become an Enrolled Agent or accept the fact that your career will ONLY involve return preparation.

Nearby Enrolled Agent Jobs

However, which one you should consult depends largely on which issue you’re looking to resolve. CPAs help clients set and achieve financial goals through money management and financial planning. These goals could include anything from putting a down payment for a home to opening a new branch of business across the country. In other words, a CPA is the go-to if you’re looking for a broad scope of expertise.

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. But if you have grander ambitions for your business… If you want to be of greater service to your clients… If you want to get it on the “big bucks” in the tax world… Then you should become an EA. The answer to that questions really depends on how much you study. However, the pass rate has been hovering around 70% for the past several years. EA candidates must answer 100 questions per part, 85 of which are graded.