The Internal Revenue Service (IRS) offers the Special Enrollment Examination to tax practitioners who want to become enrolled agents. This is the highest credential for tax professionals that is recognized by the IRS.
Once you pass this exam, you are licensed by the federal government to represent taxpayers before the IRS. This is usually done when someone is being audited or having other significant tax troubles.
The test can be difficult. To pass, you'll need good study habits and top-notch IRS and tax resources. Here are some pointers for preparing and passing the exam.
The Enrolled Agent Program
Once they are licensed, enrolled agents have unlimited practicing rights. This means they can represent any taxpayer before the IRS on any tax matter.
Enrolled agents may also be former IRS professionals.
To become an enrolled agent you will need to:
- Get a Preparer Tax Identification Number (PTIN)
- Schedule, prepare for, and pass a three-part exam covering all aspects of federal taxation
- Apply for enrollment by filling out IRS Form 23 and paying an enrollment fee
- Pass a suitability check, which involves both your tax history and a background check
The IRS website provides information on each of these steps.
Signing Up to Take the Exam
The Special Enrollment Exam is administered by a private company, Prometric, on behalf of the IRS.
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. You do not have to take all the parts at the same time, or even in a particular order.
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.
Exams are offered between May and February. There is no testing in March and April. You will need to check the Prometric website to find out what the current fees are for each part of the exam.
How the Enrolled Agent Exam is Structured
Each part of the exam has approximately 100 questions, and they are usually in one of three multiple-choice formats:
- Direct question
- All of the following except
- Incomplete sentence
The results of the exam are scored by calculating the number of questions answered correctly out of the total number of questions. That number is then converted to a scale that ranges from 40 to 130.
Prepare for the Enrolled Agent Exam
An enrolled agent is a top tax professional, so the exam is comprehensive and challenging. You will need to prepare thoroughly in order to pass.
- Create a study plan: The National Association of Enrolled Agents (NAEA) offers a prep course, and the IRS has sample test questions. Be willing to commit a couple of hours per day to studying.
- Find a study class: 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. In addition to the NAEA's course, some community colleges offer tax and test preparation classes as well.
- Take care of your mental and physical health: Get plenty of rest, exercise, and adequate nutrition in the two weeks leading up to the EA exam. Instead of cramming, review your notes to get an overall feel for the main points of the test.
- Be ready on test day: Arrive early to your test site on test day. Give yourself time to get situated and mentally prepare. A relaxed, confident attitude will put you at ease and help you focus without distractions or worries.
Your results will be available immediately after the exam. If you pass, you will be told only that you passed and not given your score.
If you fail, you will be told your score, as well as diagnostic information to help you prepare for your next attempt.
After the Test
Don't worry if you don't pass the first time, or if a particular topic is confusing. Many tax professionals have to take the exam multiple times to pass all three parts.
You are allowed to take each part up to four times between May 1 and February 28, and you have a two-year window from when you pass one part to pass the remaining two.
If you do not pass a part within four attempts, you must wait until the next testing period to try again.
Once you pass, you will need to keep your status current by:
- Renewing your PTIN every year
- Completing 72 hours of continuing education every three years, including a minimum of 16 hours every year
- Submitting Form 8554 every three years
In addition to your IRS requirements, you will also want to maintain your professional status. Be willing to tackle difficult tax returns. Stay familiar with IRS collections, appeals, and audit processes. Network with other enrolled agents and CPAs to keep up to date on the latest developments in federal and state tax issues.