The Enrolled Agent (EA) designation is the best kept secret in the U.S. tax industry. There are over 650,000 active CPA’s but only 87,000 EAs so it’s understandable why the designation receives less attention. Despite its relative obscurity, the EA is the highest designation granted by the IRS and offers many of the same privileges as the CPA. Here’s an in-depth look at the unique benefits of earning this tax professional title.
The Benefits of Becoming an Enrolled Agent
1. No College Degree Required
Compared to the CPA or other certifications, the EA has relatively little requirements. Essentially, becoming an EA hinges on passing the three-part Special Enrollment Exam (SEE). There are no education or experience requirements. Additionally, after passing all three parts of the test within two years, you have to pass a suitability check.
Here’s what it takes to become an Enrolled Agent:
1. Obtain a Preparer Tax Identification Number (PTIN). This is pretty easy; you make an account on the IRS website and complete an application.
2. Pass the Special Enrollment Examination (SEE). You also can become an EA if you have worked for the IRS for at least 5 years and you do not have to take the SEE. The SEE exam is a three-part test in which each part has you answer 100 multiple choice questions in three and a half hours. The exam is not easy, but definitely passable with some studying, and previous tax experience helps.
3. Apply for Enrollment and pass a background check. The IRS just wants to make sure you have been compliant with your personal taxes and that you don’t have a record of poor ethics and/or financial crime.
This process is much easier and much, much less expensive than getting a degree in order to become a CPA or another finance related job.
2. Universal Representation Rights
Become a champion of the taxpayer by becoming an EA. An EA can represent clients before any office of the Internal Revenue Service (IRS). This includes audits, collections, and appeals. You do not need a tax law degree. This is a special privilege only granted to CPAs, lawyers and EAs which will put you among a scarce group of professionals.
3. Federal Recognition
Because EAs are licensed by the federal government, they can practice anywhere in the U.S. This offers flexibility in relocation and also broadens your potential client base.
4. Prestige
The title “Enrolled Agent” carries weight and respect in the tax world. The rigorous testing and ethical standards associated with the designation ensure that EAs are held in the highest regard. The designation sets you apart from the average tax preparer and may make it easier to break into lucrative specialty tax niches like businesses or trusts which require a high degree of tax expertise.
5. Enhanced Career Opportunities
Many diverse roles open up once you become an EA. EAs can find work in tax preparation firms, corporate tax departments, private practices, and even government entities. It is common for taxation related jobs that typically require a CPA designation to also accept the EA. For example, several recent job postings from KPMG list “Licensed CPA, JD/LLM or EA” as a requirement.
Because they have comprehensive tax knowledge and the right to represent clients before the IRS, EAs are also particularly well-equipped to start their own tax consulting firms. The possibilities are really endless for EAs, while other finance-based career paths are more narrow.
6. Job Security
Being an EA is a recession-proof job. Even when times are tough, taxes don’t go away, and they likely never will.
Ben Franklin famously said, “nothing is certain except death and taxes.”
So you can always count on finding work as an EA.
7. Lucrative $$
Given their expertise and the demand for qualified tax professionals, EAs command competitive salaries. And as you gain experience and establish a reputation, you can see substantial growth in earnings, especially for those with their own private practice.
8. Job Flexibility + Remote Work
While tax season is undeniably the busiest time for EAs, you have the option to work seasonally if you want to sacrifice the extra money for free time. This seasonality is pretty rare in the white collar job world, so it’s definitely a unique advantage.
Additionally, with the increasing digitization of tax preparation and consultation, it is not uncommon for EAs to be able to work remotely, either for clients in their home state or even across the country.
9. Continuing Education
Though becoming an EA doesn’t have many requirements, EAs do have more extensive mandatory education requirements. Though this may not seem like a benefit and more of an annoyance to some, EAs are always up-to-date with the latest changes in tax laws and procedures. This mandatory education will ultimately let you be the best and most updated tax professional you can be.
10. Building Connections
If you’re a people person, you might like that being an EA gives you the opportunity to build long-lasting relationships with clients.
The EA designation instills confidence in people. They understand they’re working with a professional who has a deep knowledge of tax matters and is bound by a code of ethics. You never know what connections and relationships will form because of this trust.
11. Professional Network
Professional groups like the National Association of Enrolled Agents and state-level equivalents allow you to network with like minded tax professionals who can help you find new opportunities, refer you business and connect you with other specialists who can help you navigate tricky tax cases you lack the in-house expertise to handle.
12. Eligible to Practice in Tax Court
A little known loophole allows EAs to practice in federal tax court after passing an additional examination. US Tax Court Practitioners are the only non attorneys allowed to practice in Tax Court and only EAs or CPAs are eligible to sit for the exam. This opens the door to the extremely lucrative world of legal representation which can command hourly rates in excessive of $500.
Becoming an Enrolled Agent opens a door to so many opportunities, challenges, and rewards. For those passionate about taxes, it’s a job that has unmatched flexibility and opportunity. As the tax landscape continues to evolve, the expertise of EAs will always be in demand, making it a very safe choice for those unsure of the future.