Becoming an IRS enrolled agent is one of the most impactful ways you can invest in your career as a tax preparer. If you’re looking for ways to grow your tax preparation business, here’s how being an enrolled agent could help:
What is an Enrolled Agent?
Other than CPAs and attorneys, enrolled agents are the only other tax preparers who have unlimited representation rights before the IRS. As an enrolled agent, you can represent any taxpayer in almost any situation.
Since non-credentialed tax preparers have no representation rights and Annual Filing Season Program participants have only limited representation rights, the enrolled agent credential offers a chance to significantly expand your services.
Steps to Becoming an Enrolled Agent
Because enrolled agent status is “the highest credential the IRS awards,” earning it does take time and commitment.
There are two paths to becoming an enrolled agent. The first and most common involves taking a comprehensive exam and following these steps:
1. Obtain a PTIN
Requesting your Preparer Tax Identification Number or PTIN usually only takes 15 minutes and is free of charge.
If you’re already working as a tax preparer, you can use your current PTIN.
2. Pass the Special Enrollment Examination (SEE)
The SEE consists of three parts:
- Representation, Practices, and Procedures
You’ll register for each portion separately and pay a fee of $184.97 per test. You’ll need to pass all three sections within two years.
3. Submit Application to the IRS
After you’ve successfully passed the SEE, you can complete your enrolled agent application online or by mailing Form 23 to the IRS.
4. Pass the IRS’s Suitability Check
The suitability check will look into your criminal background and tax compliance history. Any unfiled returns or unpaid taxes could disqualify you, so make sure that you’re up to date and compliant before submitting your application.
The second, less common path to enrolled agent status is for former IRS employees who meet requirements to bypass the SEE. If you have at least five years of experience in certain IRS positions, you can become an enrolled agent by passing a background check and verifying your training and work experience.
Maintaining Enrolled Agent Status
Fortunately, after the hard work of earning your enrolled agent credential, maintaining it is relatively simple.
You’ll need to renew your PTIN each year and complete 72 hours of approved continuing education every three years, with a minimum of 16 hours per year. At least two hours per year should relate to ethics and/or professional conduct. Be sure to verify that you’re obtaining your continuing education credits through an IRS-approved provider.
Be sure to check out the IRS’s Enrolled Agent FAQ page if you think becoming an enrolled agent is the right step for you.