If you’re exploring career options in finance or looking for a job you can dive into without a college degree, you might have come across the term “enrolled agent.”
Sounds fancy, right? But what is an enrolled agent…and is it a career worth pursuing?
At their core, EAs are tax experts. And with nearly $5 trillion collected in taxes yearly, enrolled agents serve a crucial role. Whether you’re curious about what EAs do, how to become one, or if the role fits your goals, this guide breaks it all down.
Key Takeaways
- Enrolled Agents Are Tax Experts: EAs specialize in tax law, preparation, planning, and tax representation before the IRS.
- No Degree Required: You can earn enrolled agent status without a college degree, making it an accessible career option.
- Unlimited Practice Rights: EAs can represent any taxpayer in any tax matter, anywhere in the U.S.
- Competitive Salary and Flexibility: EAs earn solid incomes with opportunities for remote work and highly flexible schedules.
- Continuing Education Is Key: To maintain their credentials, EAs must complete 72 hours of continuing education every three years.
What Is an Enrolled Agent?
An Enrolled Agent is a tax professional with government authorization who can represent taxpayers before the Internal Revenue Service (IRS). Unlike other tax professionals, EAs have unlimited practice rights. This means they can help individuals, businesses, and even nonprofits with tax matters, however big or small. Plus, state-specific regulations do not bind them; they can serve anyone in the United States.
Here’s a fun fact: the EA designation dates back to the Civil War when the U.S. government needed representatives to handle claims for war losses. The Enabling Act of 1884 was signed into law by the 21st president, Chester A. Arthur. Today, their job is all about taxes, and they’re the only tax professionals directly authorized by the U.S. Treasury Department.
What Does an Enrolled Agent Do?
Enrolled agents specialize in taxation, which means their daily tasks revolve around tax law, tax preparation, and representing clients in front of the IRS. Here’s a closer look:
- Tax Preparation: EAs help individuals and businesses file accurate and timely tax returns.
- Tax Planning: They provide advice to reduce tax liability, maximize refunds, and avoid surprises come tax season.
- Representation: EAs step in when taxpayers face audits, collections, or appeals. They’re your go-to when things get tricky with the IRS.
- Tax Compliance: EAs ensure clients follow all tax laws and meet reporting requirements.
Where Do EAs Work?
Enrolled Agents work in various settings, depending on their preferences and specialties:
- Small Businesses: Many EAs are self-employed or work for small tax preparation firms.
- Large Firms: Some join public accounting firms or law offices.
- Remote Work: Tax preparation and planning can often be done from home, making this career flexible.
- Government: Former IRS employees sometimes transition to EA roles, bringing insider expertise to private practice.
How to Become an Enrolled Agent
The path to becoming an EA is straightforward but requires dedication and a knack for numbers. Here’s what you need to do:
1. Pass the Special Enrollment Examination (SEE)
This three-part exam tests your knowledge of individual, business, and representation tax law.
- Topics include tax returns, tax planning, and ethical standards.
- Study guides and online courses can help you nail the exams.
2. Undergo a Background Check
The IRS conducts a background check to ensure you’re suitable for the role.
3. Complete Continuing Education
To maintain your EA status, continuing education is a must. EAs are required to complete 72 hours of continuing education every three years. This keeps you up-to-date on ever-changing tax laws. Check out these reviews comparing the best enrolled agent CE courses.
5 Reasons Why You Should Become an Enrolled Agent
If you’re on the fence about whether the EA path is right for you, consider these pros:
1. High Job Satisfaction
Many EAs enjoy the satisfaction of helping taxpayers navigate complicated tax issues. Whether it’s saving someone money or resolving a stressful audit, your work makes a tangible difference.
2. Strong Job Outlook
Taxes are here to stay, and so is the demand for tax professionals. The IRS is constantly updating tax codes, which means EAs are always needed to guide individuals and businesses.
3. Competitive Salary
While salaries vary, average EAs earn around $72,000 per year, depending on experience and location. Some seasoned EAs or those running their own firms earn six figures.
4. Flexibility
From working remotely to setting your own hours, EAs have the freedom to tailor their careers to their lifestyles.
5. No Degree Required
You don’t need a college degree to become an EA; you just need a strong understanding of tax law and a willingness to learn.
What Others Are Saying About Becoming an EA
When deciding between becoming an enrolled agent or pursuing another career, it’s helpful to hear from those who’ve walked the path. Here’s what other industry professionals have to say in a thread about why the EA designation might be the right choice for you:
Targeted Career Path in Tax
If you know you want to stay strictly in tax and not venture into financial accounting or audits, the EA designation is a strong choice. Many professionals agree that becoming an EA allows you to focus on tax without the need for the broader financial knowledge required of CPAs.
“If you plan to solidly stay in tax and not touch financials/audits, it’s a great option. It’s also a smaller time commitment to study. You’re young—do it now! You can always reevaluate CPA later if you feel like it.”
More Time-Efficient Path
Compared to the CPA certification, the EA designation requires significantly less time and effort to prepare for the exams. Many EAs report being able to pass all parts of the EA exam within just a few months, making it a manageable and efficient path to entering the tax profession.
“I spent about 4 months, start to finish, on all the exams, and it’s paid me back in dividends.”
No Pay Penalty with an EA License
With a current shortage of CPAs and an increasing demand for tax professionals, EAs are finding that their credential is widely accepted in many tax-focused positions. The perceived gap in earning potential between CPAs and EAs is narrowing, with salaries for EAs increasing due to market demand.
“With an actual CPA shortage, EA is now accepted in most positions, and I’m not being paid any less.”
“Well, there’s a talent pipeline issue—most people doing taxes are eligible to retire, and not enough are taking their place. Supply and demand mean salaries are going up.”
Lucrative Career Without CPA Requirements
For those who don’t want to meet the additional educational and licensing requirements to become a CPA, the EA designation offers a more straightforward path to a rewarding career in tax. Professionals with EA credentials report earning comfortable six-figure incomes and thriving in their careers.
“I graduated 13 years ago and make $200k+ a year. I live very comfortably.”
Passion Grows with Expertise
Some professionals stress the importance of focusing on what pays well, noting that passion for work often develops as you become skilled in your role. The EA designation provides the opportunity to specialize in a high-demand field while discovering unexpected satisfaction in helping clients with their tax needs.
“Drop the idea of pursuing your passion because you’ll become passionate about things you’re good at that pay well. I’m passionate about calculating estimated tax payments for clients, but I didn’t know that in college.”
How Does an Enrolled Agent Compare to Other Tax Professionals?
EAs are often compared to Certified Public Accountants (CPAs) and tax preparers. Here’s how they stack up:
| Profession | Focus | Requirements | Representation Rights |
|---|---|---|---|
| Enrolled Agent (EA) | Taxes only | Pass SEE; 72 hours of continuing education | Unlimited |
| Tax Attorney | Legal tax matters, litigation | Law degree; pass the state bar exam | Unlimited, including tax court |
| CPA | Accounting, auditing, financial consulting, taxes | Bachelor’s degree; CPA exam | Limited (state-specific) |
| Tax Preparer | Tax returns only | Varies (no federal license required) | None |
If you’re passionate about taxes and want the authority to represent clients before the IRS, becoming an EA might be the perfect fit.
Final Thoughts
Pursuing an EA license offers an excellent career path for those who love tax-related problems and assisting others with their financial goals. This profession stands out for its high job satisfaction, growing demand, and attractive earning potential. Additionally, its flexibility and the absence of a degree requirement make it an accessible and appealing option for individuals from diverse backgrounds.
If you’re ready to take the next step, start by learning more about the Special Enrollment Exam and diving into the world of tax law. Who knows? You could be the tax expert everyone turns to when they need help navigating the tricky world of taxes—and make some good money in the process.
FAQs
Enrolled agents assist taxpayers with tax preparation, planning, compliance, and representation before the IRS. They help people and businesses navigate complex tax issues.
It depends. EAs focus exclusively on taxes, while CPAs handle broader financial services. For tax-specific needs, an EA may be the better choice.
Depending on how quickly you pass the SEE exam, it typically takes 3-12 months to become an EA.
EAs prepare taxes, offer tax planning advice, and represent taxpayers during audits, appeals, and collections before the IRS.
EAs earn income by charging fees for tax preparation, planning, and representation services, either as employees or self-employed professionals.
