Individuals involved in tax planning, filing of income tax returns and other tax related work are sometimes required to act as representatives of their clients before the income tax authorities. An individual interested in doing such work may obtain Enrolled Agent license from Internal Revenue Service (IRS).
After obtaining this license, an individual can represent his/her clients in all tax related matters. Enrolled agents are allowed to carry out their practice from anywhere in the U.S.A. In order to obtain this license, an individual is required to demonstrate expertise in all tax related issues/matters and is also expected to behave ethically and professionally while handling such issues/matters.
Even though attorneys and Certified Public Accountants are not required to obtain EA license in order to represent their clients before IRS, obtaining EA license can help them in marketing their expertise in all tax related matters and in attracting more clients.
Five Important Steps in Becoming EA
Understand Examination Structure
An individual is required to clear three parts (individuals, businesses and representation, practices and procedures) of EA examination in order to become an Enrolled Agent. There are 100 multiple choice questions in each part. Examination fee is $ 105 for each part. Examination name is Special Enrollment Examination (SEE).
An individual interested in obtaining EA license is required to obtain Preparer Tax Identification Number (PTIN). This requirement has been made mandatory with effect from 1 January 2011 for all individuals engaged in preparing tax returns (for a fee). This number can be obtained by submitting an online or paper application.
An individual can easily create an online account for obtaining PTIN on IRS website. Initial application fee is $ 64.25 and renewal fee is $ 63. This fee can be easily paid with the use of online account and debit or credit card. Once all the formalities have been completed, PTIN is issued online to the applicant.
Register For Exam
An individual is required to create an online account on Prometric’s website and complete Form 2587 to register for exams. Thereafter, he/she will be able to schedule the exams.
An individual is not required to appear for all the parts on a single day. He/She can appear for different parts as per his/her own convenience.
Study For Exam
An individual can purchase online study materials from well known publishers. Use of IRS publications can also help an individual in obtaining understanding of various tax laws, rules and regulations. Such publications can be purchased directly from IRS website. It is important to remember that a lot of commitment and hard work is required on the part of candidate to clear SSE.
Evaluating Results And Obtain License To Practice
An individual is required to score atleast 105 in each part to clear the exam. Examination results are displayed instantly. Once all the parts have been cleared by the individual, he/she is required to complete and submit Form 23 (Application for Enrollment to Practice) along with an application fee of $ 30. This form is required to be filed (with IRS) within 1 year from the date of passing all the exam parts.