There are many ways in which you can embark on a career in finance. Whether you are a student, someone looking to change their career, or you are already in finance and looking to diversify your job prospects, there are many options available to you. For example, some people think that the only thing you can do with an accounting degree is just that—accounting. Yet there are many more such as becoming an attorney, a financial analyst or even an enrolled agent. Becoming an enrolled agent is unique in many ways, the most defining being that you do not need a college degree. If you are interested in becoming an enrolled agent, here are a few tips on what an enrolled agent is and how to get there.
What is an Enrolled Agent?
To put it simply, an enrolled agent (or EA) is someone who is a tax expert. These tax experts are unique in that they are the only federally licensed tax practitioners who specialize specifically in taxation and also have unlimited rights to represent taxpayers before the IRS. Yes, that means that an EA can appear in place of a taxpayer before the IRS. An EA not only represents a taxpayer, but he or she can also advise them and prepare tax returns for many clients, including corporations, estates, partnerships, trusts, and even individuals with tax-reporting requirements.
Education Required
As mentioned before, it is not required by the IRS for an enrolled agent to have a bachelor’s degree. There are, of course, many agents in the field authorized to work who do have a degree, but the IRS is primarily concerned with how knowledgeable the candidate is of tax law. This opens the door for many people who wish to advance in their career but do not want or are financially unable to complete a degree. However, it is not as simple as wanting to be an enrolled agent; the applicant has to complete an exam called the Special Enrolment Examination (or SEE), as well as complete other requirements. Below is an outline of what to expect from the exam and how to best prepare for it.
The SEE
Studying and passing the exam can feel like an arduous task—especially for those who do not claim to be good test-takers. However, getting a passing score on the exam is totally attainable. The SEE is a closed exam, which means that the official questions on the test are not available to the public. However, there are study materials available to help prepare. On the exam, you will be tested on your knowledge of technical tax matters. The exam has three parts:
- Part I – Individuals
- Part II – Businesses
- Part III – Representation, Practice, and Procedure
Luckily, there are many methods of studying for the exam. You can acquire enrolled agent training online or through published exam guides. If you decide to take the exam, you’ll need to register through a Prometric account.
Other Steps
Other steps in the process include:
- Obtaining a personal Tax Identification Number, or PTIN
- Passing the SEE
- Apply for enrollment Form 23
- Undergoing a background check, including and evaluation of the applicant’s tax history.
IRS Experience
Alternatively, if you already have IRS experience, you may become an enrolled agent simply because you have technical experience from already working with the IRS for a period of time. This route requires that you:
- Have a year’s worth of past experience in a specified Circular 230
- Applied for enrollment Form 23
- Undergo a background check
As you can see, the process is very similar to that of the other route, with the exception of replacing the SEE with a year’s experience under the employment of the IRS.
After Becoming Enrolled
Once you become an EA, you can now represent in the place of the taxpayer to the IRS. As an entry level EA, you will make on average about $23,00 a year. As you gain experience, you can expect a salary of an average of $45,000 annually. Senior EA’s can make more—up to about $127,000. This can rival a CPA income over time. If you are torn between being a CPA or EA, consider that the demand for EAs is growing quicker than that of CPAs. Check out local salaries on Indeed to see what you can expect to make in your areaAlso, an EA has a more flexible schedule, which may appeal to some people who have families or other interests. An EA also gets to work independently for clients instead of in an office. Therefore, CPA’s have a more predictable career and salary.
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