naea national association of enrolled agents your career as an enrolled agent

NAEANational Association of Enrolled Agents

Your careeras an

Enrolled Agent

www.naea.org

POP QUIZ

What does EA stand for?

Today we are going to talk aboutWhat’s an Enrolled Agent?What is the licensing process to

become an Enrolled Agent?How does becoming an Enrolled

Agent help you in your career goals?

What is an Enrolled Agent?Enrolled Agents (EAs) are tax

practitioners with technical expertise in taxation and are fully authorized to represent taxpayers before all administrative levels of the Internal Revenue Service (IRS) including audits, collections and appeals.

Enrolled Agents can be self employed or work for small or large firms.

What License allows you to represent taxpayers before the IRS?Enrolled Agent – Federal –

Licensed by the United States Treasury

Certified Public Accountant –Licensed by a state

Attorney – Licensed by a state

How do Enrolled Agents differ from other licensed taxpayer representatives?

Enrolled Agents are the only taxpayer representatives who receive their license from the United States Treasury.◦CPAs and Attorneys are licensed by

each individual state.

How will the EA license benefit me?It is a profession with:

◦ Job security Everyone pays taxes and the tax laws are

complicated.

◦Widely useful knowledge Many companies prepare their financials on tax

basis accounting and accounting firms expect you to know the tax consequences of accounting decisions.

◦Structure Adherence to tax law ensures accurate results.

◦Meaningful work Professionals who are proficient in tax law are held

in high regard.

How many Enrolled Agents are there?

There are approximately 40,000 Enrolled Agents in the United States

There are also Enrolled Agents living and working in foreign countries

What % of all jobs in the United States are provided by small businesses?

A. 20%B. 33.3%C. 55%D. 1%

POP QUIZ

What % of all jobs in the United States are provided by small businesses?

A. 20%B. 33.3%C. 55% CorrectD. 1%

POP QUIZ

How do I become an Enrolled Agent

Pass the IRS Special Enrollment Exam

-OR- Be an employee of the IRS for 5

years – regularly interpreting the provisions of the IRS Code and Regulations

What is the Enrolled Agent exam?

Comprehensive three-part tax exam which covers taxation issues for:◦Individuals◦Businesses

Corporations, partnerships, estates and trusts

◦Representation, Practices and Procedures (including Ethics)

How comprehensive is the Enrolled Agent exam?

You are allowed 3.5 hours to complete each of the three parts

Each part contains 100 multiple choice questions

Parts can be taken in any orderPassed parts of the exam remain

active for 2 years

What is the historic pass rate for the Enrolled Agent exam?

A. 60%B. 90%C. 42%D. 70%

POP QUIZ

What is the historic pass rate for the Enrolled Agent exam?

A. 60%B. 90%C. 42%D. 70% Correct

POP QUIZ

How can I prepare to take the Enrolled Agent exam?

Self studyFacilitator-led correspondence

coursesIntensive review courseSpecialized prep courses offered

through some community colleges and NAEA chapters

Any combination of the above

I am planning on taking a CPA exam prep course, can I use this material to study for the Enrolled Agent exam?Much of the study material for the

regulation (REG) section of the CPA exam will help you pass the Enrolled Agent exam however, you should supplement this with some dedicated Enrolled Agent study material◦ Many companies that offer CPA review courses

also offer Enrolled Agent prep courses

Are there any other requirements to be an Enrolled Agent?

In addition to the application fee payment, the Treasury Department will conduct a background investigation based on detailed information you must provide after you pass the exam. ◦ The investigation will include an examination (not

an audit) of your tax returns for the past 3 years.A college degree is not a requirement to

become an Enrolled Agent, making Enrolled Agent an ideal part time career choice for students in the accounting and taxation field.

Who is the largest taxpayer in the United States?

A. MicrosoftB. ExxonMobilC. Berkshire HathawayD. AppleE. Chevron

POP QUIZ

Who is the largest taxpayer in the United States?

A. Microsoft B. ExxonMobil Correct $31 Billion (2013)C. Berkshire HathawayD. Apple E. Chevron

POP QUIZ

Can I get a part time job as an EA or potential EA while I am still a student?Temporary agencies, especially those

that specialize in accounting and taxation, allow students to work flexible schedules and gain experience in tax preparation while they are preparing for the Enrolled Agent exam.

Employees who have a license, such as an Enrolled Agent, command higher salaries even while working in temporary positions

What other employment opportunities are there for an Enrolled Agent?

Enrolled Agents are needed in:◦Small and large public accounting

firms◦Law firms◦State departments of revenue◦Investment firms◦Banks◦Private practice

The IRS Commissioner is the head of the Internal Revenue Service. The Commissioner is appointed by the President with the consent of the Senate. The Commissioner serves a term of

A. 1 yearB. 4 yearsC. 5 yearsD. Indefinite

POP QUIZ

The IRS Commissioner is the head of the Internal Revenue Service. The Commissioner is appointed by the President with the consent of the Senate. The Commissioner serves a term of

A. 1 yearB. 4 yearsC. 5 years CorrectD. Indefinite

POP QUIZ

I have thought about going into private practice. Is that really a possibility?There are several ways to go into

private practice; they include:◦Building a practice from the ground

up using marketing and referrals◦Purchasing a tax franchise◦Purchasing a portion or all of an

existing tax practice

How do I find a reputable tax practice to purchase and how much will it cost?

Contact a company that specializes in the sale of retiring or downsizing tax and accounting practices

Because each firm is different, each sale will be different. Expect 1.0 – 1.3 times the annual gross of the existing firm to be a good opening negotiable amount.

Is there financing available to assist in the purchase of an existing practice?

Financing is available from:◦Small Business Administration◦Local banks & credit unions◦Private equity groups◦Seller financed

Most purchases will require a 15% - 20% down payment

In 1862 the first personal and corporate income tax was levied to help pay for the Union effort in the Civil War.

This was a graduated tax with 2 tax rates of

A. 1% and 2%B. 10% and 12%C. 15% and 20% D. 3% and 5%

POP QUIZ

In 1862 the first personal and corporate income tax was levied to help pay for the Union effort in the Civil War.

This was a graduated tax with 2 tax rates of

A. 1% and 2%B. 10% and 12%C. 15% and 20% D. 3% and 5% Correct

POP QUIZ

NAEANational Association of Enrolled Agents

Challenges you to begin your careeras an

Enrolled Agent

www.naea.org