Why You Need An Approved EA Exam For License Renewal

The department of Internal Revenue Service (IRS) has been keen in improving revenue collection and improving their services in the recent past. In order to achieve their targets, the oversight of the federal tax returns has greatly improved. This is evidenced by the regulations that all preparers of the paid tax returns use PTIN which is an identification number for egents. In addition to this, one has to pass the EA exam before being licensed and getting the PTIN. The license renewal also requires getting the minimum credit hours of continuing education. All these are designed to ensure that the enrolled agents are fully competent in tax return preparation.

The Enrolled Agent (EA) is the title for any licensed and federally-authorized tax practitioner. The agents are empowered to represent the taxpayers in the appeal, collection, and examination among several other administrative issues in the Internal Revenue Service (IRS) by the U. S Department of Treasury.

Other than just representing the taxpayers, they also offer additional services such as tax consultancy and preparing returns for the state and federal governments. They are overseen by the Return Preparer Office (RPO) and the regulations are available in the Circular 230.

Becoming an enrolled agent is not a one day affair. Generally, one can become an EA working with the IRS on the code interpretation position for at least five years. For the majority, the only other available avenue of becoming an enrolled agent is through passing the Special Enrolled Exams (SEE) and then passing the background check. The SEE is divided into three specific parts with the first part focusing on individuals or personal taxation, the second part focuses on business taxation, and the third and last part deal with representations, practices as well as procedures.

Generally, there is no prerequisite education or experience required for one to become an EA fulfilling the above stated requirements. The passing the SEE exam is the sure way through which you get the license and the SEE is there to ensure that an EA is able to demonstrate the knowledge and skills needed in the tax code.

However, having earned the license is not the end of the road; you have to use the Form 8554 to apply for the license renewal. However, in order to be eligible for this renewal, the enrolled agents have to complete 72 continuing education (CE) credit hours. These are completed for the 3 year cycles of at least 16 CE every year in addition to 2 CE credit hours in Ethics per year.

For the new enrolled agents, the requirement is that one completes the pro-rated CE credit hours for the first renewal to be granted. The arrangement is that the new agent earns a minimum of 2 credit hours of qualifying CE per month and 2 extra hours in Ethics CE per year. In addition to this, the documents proving the credits earned should be kept for four years.

The CE credit only qualifies if it is offered by an approved IRS CE sponsor with a valid program number. Among the courses offered in such a program includes the accounting courses, the tax preparation software and the ethics courses among others. These should be designed to enhance the professional skills of an EA can be offered online as well as in classes.

Read more about Understand The Basics Of The EA Exam.

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