Professionals who help clients with taxes may benefit from becoming enrolled agents (EAs). The IRS empowers EAs with tools unavailable to most other tax preparers. These professionals can speak on clients' behalf, argue disputes, and make cases to the federal taxation authorities. EAs can handle virtually any situation that may arise in the case of a taxpayer.
Explore why tax preparers and accountants might consider pursuing the EA credential in this guide. We also cover how to become an enrolled agent and prepare for the EA exam.
Why Get an Enrolled Agent License?
The EA credential can verify your credibility, open doors to new careers, and attract work opportunities. Tax preparers, accountants, and those wanting to move into tax preparation can gain confidence with an EA license.
- Earning Potential
- When it comes to tax preparation, EAs can do many tasks a client needs. These professionals can argue tax law, discuss audits with the IRS, deal with the IRS collections department, and make appeals. Not everyone can provide these services, which puts EAs in high demand and a position of great earning potential.
- National Credentials
- The EA credential is a federal designation handed down by the U.S. Department of the Treasury. This allows you to work anywhere in the country. Alternatively, CPA licensure is state-specific with certain restrictions. Clients know that enrolled agents can work across state lines.
- Job Stability
- EAs enjoy steady work from individuals, tax-prep firms, law firms, accounting firms, and other corporations. Virtually everyone must pay taxes of some sort, and the ever-changing tax code means even more job security for enrolled agents.
What Are the Enrolled Agent Requirements?
EA certification follows a straightforward process. Applicants do not need to hold a particular degree or meet experience requirements.
EA candidates must apply for a preparer tax identification number (PTIN), sign up for the certification exam, and pass all parts of the exam. They must also submit IRS applications and pass background checks.
Since the EA license holds federal recognition, requirements do not vary by state. Current tax preparers and accountants may find themselves well equipped to pass the qualifying exam and become enrolled agents.
Educational Requirements
The IRS does not require any specific educational background to become an enrolled agent. Applicants have to pass each section of the three-part exam and undergo a background check.
Aspiring EAs may find that an accounting degree sets them apart from their peers. Candidates who already hold undergraduate degrees may boost their skills and knowledge with a certificate in accounting or master's in taxation.
- Read about certificate programs in accounting
- Read about associate degree programs in accounting
- Read about bachelor's degree programs in accounting
- Read about master's degree programs in taxation
Professional Requirements
The IRS lists three steps to becoming an enrolled agent:
- Obtain a PTIN through the IRS.
- Schedule and pass the EA licensing exam. Candidates can then apply for enrollment through the IRS website.
- Undergo a background check. Background checks look at income tax history and any criminal background.
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What Does the Special Enrollment Exam Cover?
The enrolled agent exam is called the special enrollment exam (SEE). The SEE consists of three sections: taxation and individuals; taxation and businesses; and representation, practices, and procedures. All questions are multiple choice.
The table below breaks down each exam section:
SEE Exam Structure
| Part One: Taxation and Individuals | Part Two: Taxation and Businesses | Part Three: Representation, Practices, and Procedures |
|---|---|---|
|
|
|
Test-takers must schedule four hours for each section. This includes 3.5 hours to take the test and 30 minutes for a pre-examination tutorial and post-examination survey.
Candidates do not have to take all parts of the test on the same day or on consecutive days. They also do not have to complete the parts in any particular order. Prometric only offers the exam at its testing sites and not through off-site proctors.
Scoring the Exam
The EA licensing examination contains three parts, each consisting of 100 multiple-choice questions. Of those 100 questions, 85 questions count toward the test-taker's score. The other 15 questions are experimental and are not scored. Each question is marked right or wrong. No weighting system applies to the final score.
The IRS uses a scaled scoring system for the SEE. This approach evaluates the total number of questions answered correctly against the number of questions on the exam. The system converts this number to a scale that runs from 40-130. Test-takers must earn a scaled score of 105 or higher to pass.
At the end of the exam, candidates receive a notification on their computer screen indicating that they have passed. They will not see their scaled score. The IRS only determines if a test-taker is qualified, not how qualified they may be.
Test-takers who fail receive their scaled score of 40-104 and diagnostic information indicating which areas need improvement. The system ranks a candidates' performance in each exam area on a scale of 1-3. A score of one shows an area of weakness, while three indicates relative strength.
SEE Exam Scoring
| Section | Questions | Average Pass Rate |
|---|---|---|
| Individuals | 100 | 66% |
| Businesses | 100 | 74% |
| Representation, Practices and Procedures | 100 | 83% |
How Do You Register for the EA License Exam?
To register for the EA license exam, candidates must first create a Prometric account. Prometric requires an email address, a PTIN, a street address, and a government-issued identification document to open an account. The IRS provides a PTIN through its website.
Candidates can then choose a Prometric test center and date to take the exam. Candidates can only schedule an exam date within a six-month window.
EA candidates who do not pass part of the exam may retake that section up to four times within the testing window.
Paying for the Exam
Each part of the SEE costs $185, which is due upon registration. This fee is nontransferable and nonrefundable.
Test-takers who fail the exam must pay the same fee to retake the test. To maximize the value of their investment, candidates should wait to register until they are fully prepared to take the exam.
Candidates who pass the exam must pay a $67 enrollment fee when they apply to practice before the IRS.
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How Can You Prepare for the Enrolled Agent Exam?
For most test-takers, preparing for the SEE entails months of dedicated studying. Aspiring EAs may enroll in a course or purchase online study materials to help navigate SEE content.
Top Tips for Prospective EA Accountants
- Review Prometric's Sample Test Questions
- Prometric is the testing and assessment company that offers the SEE on behalf of the IRS. The company provides a 100-question simulated SEE. This test also introduces candidates to the technology, functions, timed approach, and best practices relevant to the SEE. These resources do not cost money.
- Commit to 150-200 Hours of Study
- Becoming an EA requires one exam. Thus, the exam covers rigorous topics spread over three 100-question sections. Test-takers often spend more than 10 hours just taking the SEE. Effective preparation for this test requires 150-200 hours of study.
- Go to the Source
- The internet offers plenty of data and information about the SEE. Test-takers should be selective with their study resources. The IRS is the most accurate source of information about U.S. taxation. Data from other sources may be out of date or inaccurate.
- Enroll in a Prep Course
- Community colleges and educational assessment companies offer online and in-person preparation courses for aspiring EAs. These programs may include computer-based lessons, study guides, lectures, or practice exams. Some programs offer access to learning aids, like digital flashcards or simulated exams. Others provide one-on-one support.
- Hire a Tutor
- Hiring an experienced tutor can create accountability and support for test prep. Exam-takers can search for qualified tutors using online education boards or social media. The best tutors have passed the SEE and have personal experience with income tax preparation and adult education.
Practice Exams and Study Resources
The IRS is the definitive source of information regarding the SEE, becoming an EA, and the EA retirement program. Aspiring enrolled agents can discover the latest news affecting their profession and stay up to date with certification requirements.
Founded in 1972, this community of tax practitioners serves more than 10,000 professionals. The association's site offers extensive information on becoming an enrolled agent, plus tips for passing the SEE. The NAEA also provides continuing education opportunities and career development resources.
An international test administration agency, Prometric administers the SEE on behalf of the IRS. Test-takers can access a variety of resources through Prometric. Resources include extensive information about the test, scoring, and retesting. Prometric also offers a 30-minute test simulation.
What Is Needed to Maintain EA Accounting Certification?
Enrolled agents must renew their certification with the IRS every three years. Each EA's renewal year is determined by the last digit of their Social Security number. Agents can file their renewal applications online or on paper.
Based on their renewal cycle, each agent must complete 72 hours of continuing education, with a minimum of 16 hours each year. At least two hours per year must focus on ethics. An IRS provider must conduct the continuing education experiences.
Should You Get Multiple Certifications?
The IRS only offers EA certification. However, enrolled agents may hold additional accounting or tax certifications.
A certified public accountant (CPA) license, for example, allows accountants to work in auditing, accounting, and financial planning. Enrolled agents may also become certified tax preparers and work with private companies.
EAs who also hold CPA licensure and wish to investigate financial crimes might consider becoming certified in financial forensics (CFF). The American Institute for Certified Public Accountants offers CFF certification to CPAs. Candidates must have a bachelor's degree and have completed at least 75 hours of professional education in the last five years.
- Learn how to earn a CPA certification
- Learn how to earn a CFF certification
- Learn how to earn a certified tax preparer certification
Frequently Asked Questions About EAs
What does an enrolled agent do?
An enrolled agent represents taxpayers before the IRS. EAs may prepare and file tax returns or handle communication between the IRS and a taxpayer undergoing an audit. EAs may not represent taxpayers in tax court.How do you become an enrolled agent?
Becoming an enrolled agent begins with obtaining a PTIN. Candidates must then pass all three parts of the SEE. Finally, prospective EAs apply for enrollment with the IRS and pass a suitability check.How long does it take to get an EA certification in accounting?
How long it takes to get EA certification depends on the candidate's tax law and accounting knowledge. Well-prepared test-takers may pass the exam with little additional study. Other candidates may need several months of preparation time.Is an EA accountant higher than a CPA?
EA accountants hold licensure with the IRS and may represent taxpayers before the agency. CPAs have licensure at the state level. According to Payscale, CPAs earn about 35% more than EAs as of November 2021.Featured Image: PhotoAlto/Eric Audras / PhotoAlto Agency RF Collections / Getty Images
FAQs
How many questions do you have to get right on the EA exam? ›
Scaled scores are determined by calculating the number of questions answered correctly and converting it to a scale that ranges from 40 to 130. The IRS has set the scaled passing score at 105. Failing candidates are provided a scaled score value so that they may see how close they are to being successful.
What percentage of people pass the EA exam? ›The EA Exam, also known as the Special Enrollment Exam (SEE Exam), is one of the easier tax professional credential exams, with about a 70% national pass rate. Compare that to the CPA and CMA Exams, which are both closer to 50% on average.
How hard is the IRS EA exam? ›How hard is the EA exam? The IRS Enrolled Agent exam pass rate fluctuates from 70% to 74%. This is a high pass rate compared to other professional accounting exams, like the CPA, which has an average pass rate of 45-50%. The IRS sets a scaled passing score at 105 out of the available 130 points.
Which EA exam is the hardest? ›The most difficult test for most candidates is Part 2 (Businesses). Only about 60% of exam takers have passed this part in the past three years. Part 1 of the exam (Individuals) is also challenging; approximately 75-80% of exam-takers have passed this part of the exam in the past three years.
How long do you have to pass all 3 parts of EA exam? ›You have two years* to pass all three parts of the EA exam, so while you do not technically need to pass all three in the same year, many candidates want to pass before tax season to get more clients. This means appointments to take the exam early in the year can fill up quickly.
Can I pass the EA exam in a month? ›You may hear some enrolled agents boast that the EA exam is easy and that they passed it in just a few weeks. Yet, the reality is that most candidates are not able to pass in 1 month. You may need more than 1 month or even more than 1 year to pass.
Is the EA test harder than CPA? ›Most people who have taken both report that the CPA Exam is more difficult to pass than the EA exam. The reason for this is the amount of information both exams cover. EAs must be tax experts, so the SEE goes into great depth on tax matters.
How long should you study for EA? ›How much time should I expect to review the Enrolled Agent study material? Depending on experience, you should expect to invest up to 40-70 hours of total study time for each exam part.
Is the EA exam curved? ›All of the questions on the examination are weighted equally, and the IRS grades the test on a bell curve.
What if I fail the EA exam? ›Candidates who fail will be told their score, as well as diagnostic information to help prepare for re-examination. Candidates who do not pass a part of the exam after four attempts during the May 1 through February 28 test window must wait until the next testing period before attempting the part again.
Which EA exam should I take first? ›
Part One – Individuals
We suggest that you start with part one, because this is based on individual tax returns – this directly relates to the work and tasks that you will have been doing as a tax preparer to date.
Technically, you can take the three parts of the EA exam in any order. We recommend you take them in their natural order 1-2-3. You should save Part 3 for last, regardless, because your prep for Parts 1 and 2 will help you on Part 3.
How hard is part 3 of the EA exam? ›Part 3 focuses on the taxation process and, according to the pass rates, seems to be the easiest EA exam part. The Part 3 pass rates are some of the highest of any accounting certification exam, as they've hovered above 80% for several years now.
How hard is it to become an IRS Enrolled Agent? ›EA certification follows a straightforward process. Applicants do not need to hold a particular degree or meet experience requirements. EA candidates must apply for a preparer tax identification number (PTIN), sign up for the certification exam, and pass all parts of the exam.
What is the first toughest exam? ›Top 10 Toughest Exams in World To Crack in 2023. Recent Update: IIT-JEE, UPSC CSE, and GATE are among the world's most difficult exams. In the ranking, the IIT JEE test is ranked first in India and second in the globe.
What is the easiest part of the EA exam? ›Part 3 is reputed to be the “easy” part, but it's still important to study.
What is the best way to study for the Enrolled Agent exam? ›- Get a review course specifically for the Enrolled Agent Exam. ...
- Be aware of any new material. ...
- Prioritize understanding the fundamentals. ...
- Memorize basic tax formulas. ...
- Get familiar with Prometric's exam day procedures.
It's definitely recommended! Many CPAs have chosen to obtain sit for the Enrolled Agent Exam and earn the credential because it provides the same IRS representation rights as a CPA. But, unlike the CPA, an EA is recognized in all 50 states.
How long does it take to get EA exam results? ›If you take the assessment online, program recipients you selected will receive your results within 24 hours. If there are additional schools you would like to see accept the Executive Assessment, please contact us.
Why EA is better than CPA? ›The primary difference between the two is that the license of an EA is authorized by the federal government, i.e., the Internal Revenue Service (IRS), giving them nationwide authority. The CPA license is issued by any of the 55 U.S. states, restricting a CPA's authority to the state level.
Does EA make more than CPA? ›
An EA with many years of experience could earn more than a CPA who is in their first year or two in practice. However, if you are a CPA, your income will quickly outpace that of an EA. The median salary for a CPA is $62,123 versus $49,000 for an EA.
Should I become an EA or a CPA? ›If you have accounting needs with a micro focus, working with an EA could be the perfect fit for you. On the other hand, if you are interested in accounting practices that have nothing to do with taxes, such as auditing, then the CPA option may be best.
How hard is it to get 150 on Executive Assessment? ›Incidentally, the average score worldwide on the Executive Assessment is currently 150. To achieve an EA score of 150, you need to average 10 on each of the three sections of the exam.
What is a 75 on CPA Exam? ›Most CPA candidates know they need a “75” on each of the four exam sections to pass the CPA Exam, but “75” does not mean answering 75% of the questions right. Rather, 75 is the amount of points a candidate has earned for answering questions correctly, and different questions are worth different amounts of points.
Does the CPA Exam get harder if you are doing well? ›The first testlet is always a medium testlet. If a candidate performs well on the first testlet, he/ she will get a more difficult second testlet while those who do not perform well on the first testlet will receive a second medium difficulty testlet. This testing process is called multi-stage testing (MST).
Does EA test geometry? ›Quantitative Reasoning
The most notable difference is that there are no geometry questions on the EA. (Questions on coordinate planes can appear on the EA, but GMAC considers those algebra questions.)
The Executive Assessment can be taken up to two times via online. These two attempts are independent of any attempts completed in-person at a Test Center, as well as any additional attempts required because of a verified technical issue.
What is the minimum EA score? ›The highest overall Executive Assessment (EA) score is 174, and the lowest is 126. The scale supposedly runs from 100 to 200, but we still haven't seen scores outside of the 126-174 range.
Is the EA exam multiple choice? ›The exam consists of 5 separate sections and candidates have 3.5 hours to complete it. The EA exam is a multiple choice exam with four possible answers for each question.
What kind of questions are on the EA exam? ›- Direct questions These are the most common EA exam questions. ...
- Incomplete sentencesWith this style of question, you will need to select the answer that best completes the sentence.
- Negative questionsThese questions include the words NOT or EXCEPT in all caps.
What is the highest paid Enrolled Agent? ›
While annual EA salaries within the US range between $25,500 and $97,000, the majority of EA salaries currently fall between $45,000 (25th percentile) to $68,500 (75th percentile) with top earners (90th percentile) making $86,500 or more.
What is the highest Enrolled Agent salary? ›The salary range for an enrolled agent is generally between $45,000 and $125,000 per year for those employed by a firm.
What is the average income for an IRS agent? ›Average Internal Revenue Service Revenue Agent yearly pay in the United States is approximately $71,253, which is 10% above the national average.
Which is 2nd toughest exam? ›| Particulars | Details |
|---|---|
| Exam duration | 3 hours |
| Eligibility | 75% aggregate marks in class 12 |
| Exam Level | All India Level |
| Total marks | 300 |
| Top 10 Easiest Entrance Exams in India | |
|---|---|
| Exam Conducting Body | Exam Name |
| Railway Recruiting Board | RRB NTPC |
| Staff Selection Commission | SSC JE |
| Institute of Personnel Banking Selection | IBPS Clerk |
Central Teachers Eligibility Test (CTET): Easiest Competitive Exams in India. The Central Board of Secondary Education in India administers the CTET, or Central Teacher Eligibility Test, as a national examination (CBSE).
What is on Part 1 of the EA exam? ›Part 1 of the IRS Special Enrollment Examination (SEE) exam covers individual income, deductions and credits, estate tax, gift tax and FBAR.
How to pass EA exam Part 1? ›- Know the material. The number one step you can take to prepare for any test is to know the material. ...
- Identify your weak areas. ...
- Take good notes. ...
- Answer plenty of practice questions.
As we just discussed, most EMBA programs consider an EA total score of 150 or higher a good EA score.
Is 148 a good EA score? ›...
Executive Assessment Scores.
| EA Score | Percentile (Better than x% of test takers) |
|---|---|
| 150 | 53 |
| 149 | 46 |
| 148 | 40 |
| 147 | 34 |
Is 154 a good EA score? ›
Competitive EA Scores
150 is often deemed the “Magic Number” in EMBA conversations, but at Menlo Coaching, we recommend a score in the mid-150s for applicants to top EMBA programs.
How much time should I expect to review the Enrolled Agent study material? Depending on experience, you should expect to invest up to 40-70 hours of total study time for each exam part.
What is the best way to study for the EA exam? ›- Get a review course specifically for the Enrolled Agent Exam. ...
- Be aware of any new material. ...
- Prioritize understanding the fundamentals. ...
- Memorize basic tax formulas. ...
- Get familiar with Prometric's exam day procedures.
On the EA exam, candidates have 3.5 hours to answer 100 MCQs. In contrast, the REG exam requires candidates to complete 76 MCQs and 8 TBSs within 4 hours. The EA exam dedicates a bit more attention to limits, phase-outs, and income brackets. Therefore, the EA exam is not extremely difficult.