CSEA Education Foundation

CSEA

Enrolled

Agent

Jean Nelsen, EA

POP

QUIZ

Today we are going to talk about

 What’s an Enrolled Agent?

 What is the licensing process to become an Enrolled Agent?

 How does becoming an Enrolled

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

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

How do I become an Enrolled

Agent

 Pass the IRS Special Enrollment Exam (SEE)

-OR-

 Be an employee of the IRS for 5 years – regularly interpreting the provisions of the IRS Code and Regulations

What is the SEE 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 SEE

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 order

 Passed parts of the exam remain active for 2 years

What is the historic pass rate for

the SEE exam?

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

What is the historic pass rate for

the SEE exam?

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

D. 70% Correct

How can I prepare to take the

SEE exam?

 Self study

 Facilitator-led correspondence courses

 Intensive review course

 Specialized SEE prep courses offered through some community colleges and CSEA chapters

I am planning on taking a CPA

exam prep course, can I use

this material to study for the

SEE exam?

 Much of the study material for the regulation (REG) section of the CPA exam will help you pass the SEE

exam however, you should

supplement this with some dedicated SEE study material

◦ Many companies that offer CPA review courses also offer SEE prep courses

Are there scholarships available

for the SEE prep courses?

 CSEA Education Foundation offers

scholarships for SEE prep courses as well as other tax courses

 Most of these scholarships will cover

100% of the cost of the SEE prep course

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

Who is the largest taxpayer in

the United States?

A. Microsoft B. ExxonMobil C. Berkshire Hathaway D. Apple E. Chevron

POP

QUIZ

Who is the largest taxpayer in

the United States?

A. Microsoft

B. ExxonMobil

C. Berkshire Hathaway

D. Apple Correct $6 Billion (2012) E. Chevron

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 SEE 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

Who prepares U.S. President

Obama’s tax return?

A. Daniel Werfel

B. Michael Solheim C. Deloitte LLP

D. Michelle Obama E. None of the above

Who prepares U.S. President

Obama’s tax return?

A. Daniel Werfel

B. Michael Solheim Correct C. Deloitte LLP

D. Michelle Obama E. None of the above

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

What % of all jobs in the United

States are provided by small

businesses?

POP

QUIZ

What % of all jobs in the United

States are provided by small

businesses?

POP

QUIZ

Let me show you some pictures of my tax practice which has been in business at the same location for more than fifteen years