EAs, unlike CPAs, cannot provide compiled, reviewed, or audited financial statements; nevertheless, they can often undertake bookkeeping work for tax return preparation. Enrolled Agents and CPAs are trained, experienced professionals who are held to high ethical standards. The IRS recognizes EAs as a trusted channel for communication and representation. They have the right to represent taxpayers before all administrative levels of the IRS, including audits and appeals. Adherence to the highest standards of ethical behavior and compliance with the IRS’s Circular 230 is mandatory.
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The National Association of Enrolled Agents (NAEA) was founded by how to become an enrolled agent a group of enrolled agents to advocate the interests of EAs and to advance their professional growth. While many Enrolled agents have a background in accounting, achieving Enrolled Agent status indicates expertise in tax representation. However, don’t worry about searching for courses that meet the EA requirements.
Step 6: Maintain and Renew Enrolled Agent Status
For broader accounting needs, a CPA can be an advantage, especially when you need a financial statement for a bank loan. With the introduction of income tax, EA’s responsibilities extended to include tax preparation and addressing taxpayer problems with the IRS. Enrolled retained earnings balance sheet agents should perform their tax responsibilities and always adhere to professional standards. They must file accurate returns, make tax payments on time, and respond promptly to the IRS when assessed.
- This renewal process ensures they have fulfilled the Continuing Education (CE) requirements and maintained tax compliance.
- “Agent” means a person authorized to appear in the taxpayer’s place before the Internal Revenue Service (IRS).
- This option is available to everyone who wants to utilize it.
- Many employers prefer candidates with previous tax filing and preparation experience.
- Finance Strategists has an advertising relationship with some of the companies included on this website.
- This timeframe includes the duration required for studying for the Special Enrollment Examination, the examination itself, and the processing time for the background check.
- The articles and research support materials available on this site are educational and are not intended to be investment or tax advice.
Step 5: Pass a Suitability Check
Should the container not meet the requirements outlined, the candidate will be required to put it in their locker and will not be allowed to take it into the test room. Paper, pencil and a calculator will be provided at the test site. Personal items are not allowed in the testing room and must be stored in a locker. Persons not scheduled to take a test are not permitted to wait in the test center.
Candidates that receive a scaled score of 104 are very close to passing. Candidates with a scaled score of 45 are far from being successful. You Food Truck Accounting will also receive diagnostic information to assist you with future examination preparation. Generally, enrolled agents must obtain a minimum of 72 hours per enrollment cycle (every three years). A minimum of 16 hours must be earned per year, two of which must be on ethics.
Once you know that you want to become an enrolled agent, you must select your path. Therefore, you should learn more about the EA vs CPA so you can be completely sure of your designation path. By following these steps, you can become an enrolled agent in 6-12 months. There are many ways to prepare for the EA exam, but studying early and often is the best method for success.
Is an Enrolled Agent Better Than a CPA?
Do you believe in holding to the highest ethical standards possible? You might make a great EA…plus you don’t need a college degree. Water is allowed in the testing room but it must be in a clear or transparent container with a lid or cap. All labels must be removed, and the container will be inspected for notes or other prohibited test aids. The candidate will need to remove the lid/cap for visual inspection by the Test Center staff.
Because this is a federal licensing program, the process is the same no matter what state you live in. If you want to become an enrolled agent by taking the online exam, you must first get a Personal Tax Identification Number (PTIN) if you don’t already have one. Enrolled agents, like attorneys and certified public accountants (CPAs), have unlimited practice rights. This means they are unrestricted as to which taxpayers they can represent, what types of tax matters they can handle, and which IRS offices they can represent clients before.
Not all test centers are equally equipped for all accommodations. Prometric has a testing accommodations request packet that you’ll need to call about. Become an enrolled agent, the highest credential the IRS awards, and find out how to maintain your status.