How to Prepare for the IRS Enrolled Agent Exam
The Internal Revenue Service offers the Special Enrollment Examination to tax practitioners who want to become enrolled agents. Why bother taking such an exam? Because passing it earns you have licensure with the federal government and unlimited rights to represent taxpayers before the IRS. When someone finds himself in serious tax trouble or in an audit, he'll want you on his side, not necessarily his local accountant.
The test is somewhat difficult so you'll need good study habits and top-notch IRS and tax resources if you're going to ace it. Studying for the exam requires hard work, patience, and planning. Here are some pointers.
The Enrolled Agent Program
An enrolled agent has passed a three-part special enrollment examination that covers all aspects of federal taxation. He must also pass an IRS background check.
The IRS has published basic information about becoming an enrolled agent, including how to register, when the exam is available, and how much it currently costs to take it. You can get the format of the EA Exam from the Thomson Prometric website. Prometric administers the Special Enrollment Exam on behalf of the IRS. Download the "Enrolled Agent Candidate Information Bulletin" from the Prometric site.
Signing Up to Take the Exam
You can register to take the exam on the Prometric website and schedule a time to take each part of the special enrollment exam. Each part is typically given on a separate day. Check the Prometric website for the current fees involved in taking the exam.
Choose a test site and test dates when you register. There are test sites throughout the United States and all over the world so you can choose the location that's most convenient for you.
Now It's Time to Start Studying
- Gather together your study materials. The National Association of Enrolled Agents mentions a number of reference and study sources on their webpage about studying for the Special Enrollment Examination.
- Adopt a study plan that covers all the tax topics on the exam. A 180-hour plan that covers each of the three parts of the EA exam pretty much equally is ideal. Consider using the study guides or study groups.
- Start early and pace yourself. There's absolutely no point in cramming at the last minute for a test covering something as difficult as taxation. Try focusing on the big picture, especially in areas of taxation that might be new to you.
- Find a study class. There are several courses available to help you study. A fast-paced review class works best if you've paced yourself and have already covered most of the tax material over several weeks of studying, but consider a test preparation class that lasts several weeks if you prefer or need more structure. The National Association of Enrolled Agents offers classes, and some community colleges offer tax and test preparation classes as well.
- Get plenty of rest, exercise, and adequate nutrition in the two weeks leading up to the EA exam. Don't focus on studying during this time. Instead, just review your notes to get an overall feel for the main points of the test. Don't cram. It will prove counterproductive.
Arrive early to your test site on test day. Get situated and remember to take deep breaths. A relaxed, confident attitude will put you at ease and help you focus without distractions and worrying.
After the test, get plenty of rest and unwind. Get ready to use your great tax knowledge. Tackle those more difficult tax returns. Get familiar with IRS collections, appeals, and audit processes. Network with other enrolled agents and CPAs to discuss the latest developments in federal and state tax issues.
Some Additional Tips
- Don't worry if you don't pass the first time, or if a particular topic is confusing. Ask questions, and eventually, you'll understand it. Try and try again if necessary.
- Think long-term. Studying for the EA exam is a big time commitment. Be willing and able to spend a couple of hours per day studying.
- Take a practice test. Set aside three half-days over several weekends to take a practice exam in a simulated test environment. Test yourself on one part at a time and grade yourself afterward. This will give you a feel for the time constraints of the exam, and it will point out the tax topics you need to review more carefully.
Don't let the test get you down. It's as simple as that.