How to become an enrolled agent: A step-by-step guide

Enrolled agents (EAs) are among the most essential and versatile tax professionals authorized by the Internal Revenue Service (IRS). There are two main pathways to becoming an enrolled agent: experienced tax professionals and newcomers alike can pursue this status by either passing the comprehensive EA exam (Special Enrollment Examination) or by qualifying through prior IRS employment.

These credentialed experts can provide a full range of tax-related services, including tax preparation, appeals resolution, and complex tax compliance. EAs possess the authority to represent individuals and businesses before the IRS for matters ranging from collections to audits, making them invaluable to those seeking guidance through tax challenges. The process of becoming one is designed to be rigorous yet accessible, opening doors for those committed to supporting clients with the highest standards of tax expertise.

What do enrolled agents do?

Enrolled agents are federally authorized tax professionals who are legally permitted to represent clients before the IRS. Their specialized training equips them to handle a wide range of tax matters and fulfill several responsibilities:

• Delivering expert tax advice to individuals and businesses
• Preparing and filing complex tax returns
• Representing clients during IRS audits
• Advocating for clients in IRS appeals and collections proceedings

The EA designation is the highest credential awarded by the IRS, granting unlimited practice rights across all 50 states and before any IRS office. Unlike other tax practitioners, EAs face no restrictions on the types or number of clients they can represent. This means they can provide tax services to anyone needing assistance, regardless of their tax situation.

While all tax professionals generally focus on minimizing tax liability and maximizing returns, EAs offer an additional level of support for clients facing IRS compliance issues. They are qualified to represent clients who owe back taxes, are under investigation for tax evasion, or face other serious claims, ensuring fair representation at IRS hearings and helping prevent further legal complications.

Here’s a summary of EA responsibilities vs. non-enrolled tax agents:

EAs also differ from Certified Public Accountants (CPAs) and tax attorneys in the scope of their work and their qualifications, though there are overlaps between all three professions. CPAs are state-registered accounting and tax prep professionals who must meet specific work and educational requirements before obtaining licensure, while attorneys must have a Juris Doctor degree and pass the state bar exam to practice. Though the certification path is more direct, EAs can be found in professional settings similar to those of both CPAs and tax lawyers, and all three must have demonstrated expertise in federal taxation.

Enrolled agents can be found working in diverse environments, such as public accounting firms (including the Big Four), small local accounting practices, banks, law offices, investment firms, and even directly at the IRS or state departments of revenue. Many EAs choose to establish their own tax and accounting practices, sometimes pairing their EA credential with a CPA license or a legal background to offer a full suite of accounting, legal, and consulting services.

In terms of professional development and networking, the National Association of Enrolled Agents (NAEA) serves as a leading organization for EAs. While it does not grant the EA designation itself, the NAEA provides valuable resources, such as continuing education opportunities and industry connections, to help members advance their careers and increase their potential salary.

How much do enrolled agents make?

According to recent data from Indeed, the average enrolled agent salary in the U.S. is approximately $72,000 per year. Top earners in this field can make close to $120,000 annually, reflecting a substantial range based on experience and qualifications. The specific salary an individual receives depends largely on factors such as years of experience, geographic location, and additional credentials. For instance, many enrolled agents pursue accounting certifications or financial licenses, such as the Series 7 alongside the Series 63, Series 65, or Series 66, which increase earning potential by enabling agents to offer more services (such as selling securities and offering financial advice within their state).

First step: Meet basic EA requirements

If you’re exploring how to become an enrolled agent, there are several steps on your path toward this highly respected tax credential. While seasoned tax professionals often pursue EA status after years in the field, many individuals also begin their journey early by preparing for the IRS Special Enrollment Examination (IRS SEE), the nationwide enrolled agent exam.

To qualify to sit for the test and officially begin the process, your first step is to secure a Preparer Tax Identification Number (PTIN) through the IRS website. Obtaining a PTIN does not require current employment as a tax professional, nor does it demand a college degree or advanced educational background.

When applying for your PTIN, all you’ll need to provide is specific information:

1. Social Security number
2. Personal details (name, date of birth, etc.)
3. Business information, if applicable
4. A copy of your most recent individual tax return
5. Explanation of any felony convictions (if applicable)
6. Details on any past issues with U.S. individual or business tax obligations (if any)
7. Valid credit, debit, or ATM card to pay the non-refundable PTIN user fee
8. Information about any U.S.-issued professional certifications (CPA, attorney, state license, etc.), including credential number, area of issuance, and expiration date, if relevant

Once you receive your PTIN, your registration with the IRS is complete, and you’re eligible to advance to the next step on the path to becoming an enrolled agent. This credentialing process establishes your eligibility for this sought-after tax profession.

Second: Pass the EA exam OR provide work history

As mentioned, one of the primary paths to qualifying as an enrolled agent is passing the IRS Special Enrollment Examination (SEE), commonly known as the enrolled agent exam or EA exam. The EA exam is divided into three parts, each consisting of 100 questions (85 scored) and requiring approximately 4 hours to complete. Focused exam prep is crucial, as candidates must demonstrate comprehensive knowledge in a range of tax topics:

• Part 1 covers individual taxation, including income sources and assets, allowable deductions and credits, taxpayer advising, and specialized returns.
• Part 2 focuses on business tax preparation and tests knowledge of taxation for private entities such as partnerships, LLCs, and S-Corps. This section covers business income, expenses, deductions, assets, credits, exemptions, and analysis of financial records.
• Part 3 addresses representation, practices, and procedures, assessing understanding of IRS rules, ethical standards, applicable laws, and how to build a case when representing clients.

Candidates can take each part of the EA exam separately, in any order. However, all three sections of the exam must be passed within a three-year period to achieve enrolled agent status.

Each part of the SEE is scored on a scale from 40 to 130. To pass, candidates must earn a minimum score of 105, generally requiring about 60-70% correct responses. It’s important to note that 15 out of 100 questions on each EA exam section are unmarked experimental items and do not affect your final score.

Alternatively, individuals may qualify for the EA designation through prior IRS service and technical experience as detailed in Circular 230. To be eligible via this route, applicants must have at least 5 years of continuous IRS employment in which they were regularly engaged in applying and interpreting provisions of the Internal Revenue Code. These professionals are exempt from the testing requirement and may submit their application form directly.

Next: Fill out necessary forms

All EA applicants must submit IRS Form 23 for full registration and enrollment. Form 23, which is available for download from the IRS website, is a concise application that requests critical information such as the applicant’s Centralized Authorization File (CAF) number, a unique nine-digit identifier issued by the IRS to tax professionals, as well as an Employer Identification Number (EIN), if applicable. Form 23 also inquires about any past tax-related sanctions or criminal convictions. All responses provided on Form 23 are subject to verification through the mandatory background check process, which is a standard part of EA requirements for every applicant.

Finally: Pass the background check

All IRS EA applicants must consent to a suitability check for the role, which includes a criminal background check and a tax compliance investigation. A felony conviction under federal tax laws, dishonesty, or breach of trust, if it occurred within the past 10 years, can seriously impact your application. Additionally, overdue tax returns, unfiled returns, or unpaid tax liabilities may also jeopardize your application review. To improve your chances of successful enrollment, promptly arrange a payment plan with the IRS and provide clear evidence that any outstanding tax matters have been settled or are actively being resolved.

How do I prepare for the EA exam?

With first-time pass rates hovering between 60% and 70%, the IRS EA exams present a notable challenge. Most candidates dedicate eight to ten weeks of focused study to each section.

To maximize your chances of passing, use these foolproof EA exam prep strategies:

• Develop a study plan that aligns with your commitments during the testing period (May 1 through February 28 of the following year). Many aspiring enrolled agents prepare for the EA exams while holding jobs or attending school, so it’s critical to strike a healthy balance between study time and other responsibilities.
• Approach each EA exam individually; although all parts can be scheduled within days of each other, or even on the same day, spacing out your exam appointments and EA exam prep will typically minimize stress and improve retention.
• Reinforce your understanding of fundamental tax concepts such as tax returns, documentation, and deductions before moving on to the more complex topics found in the EA exams.
• Use practice questions that closely replicate the IRS exam format. Leverage free official IRS resources and reputable third-party EA exam prep courses or providers to access realistic practice material.
• Complete full-length practice exams at different stages of your EA exam prep: start with a diagnostic test to assess your baseline knowledge, continue practicing to monitor improvement, and finish with a final mock exam to gauge readiness for test day.

The EA process is unique for its accessibility: almost anyone can apply for the exams, regardless of their professional background. However, if you are new to tax preparation or finance, consider enrolling in foundational courses or gaining relevant experience before beginning your exam prep.

Closing

The professional pathway to becoming an enrolled agent requires dedication and preparation, but it remains one of the most accessible routes to earning a respected accounting and finance license for committed, detail-oriented professionals. EAs enjoy numerous advantages in their careers, including:

• A broad scope of responsibilities permitted by the IRS
• Prestige and recognition from both clients and peers
• Career flexibility and diverse opportunities across the tax and accounting industry
• The unique ability to represent taxpayers without geographic restrictions before the IRS

As described by the National Association of Enrolled Agents, EAs are “employed and employable everywhere,” reflecting the high demand for their expertise. EAs serve as trusted partners to clients, guiding individuals through complex tax situations and helping businesses reduce their tax liabilities. By leveraging specialized knowledge, EAs provide invaluable support, helping clients achieve compliance and long-term financial stability, especially during challenging times.