It is said that the test which certified public accountants take is pretty much the equivalent of a lawyer taking the state bar examination.
The intensity and rigor of study needed in order to pass the exam naturally weeds out those who are less motivated, but in reality, the CPA exam is not the most difficult challenge which accountants can choose to face.
Rather, the enrolled agent exam offers an increased level of intensity that is hard and requires many to enroll in preparation courses and plan out intense regimens of study using accurate information resources.
There are three main sections of the enrolled agent exam and every portion of the test must be completed with a minimum score being met.
The test itself is a pass/fail measurement, so if applicants receive a passing mark, then all they know is that the minimum requirement was met.
Each portion of the test has one hundred multiple choice questions that must be completed in no more than three and one-half hours, which averages out to no more than two minutes per question.
Fortunately for test takers, it is administered through a computer system and questions can be marked for a revisit if there is time left over.
On average, it is recommended that at least one hundred hours of study is conducted in preparation for taking the enrolled agent exam.
Considering the fact that certified public accountants have already spent significant amounts of time preparing for and passing the CPA test, it is astounding that these professionals would voluntarily partake in such a rigorous testing process.
There are many benefits that come with passing the enrolled agent exam.
First, only an exclusive group of people are even allowed to register for the test. Only those who have a current CPA license or at least five years of experience working directly for the IRS may register for the enrolled agent, or EA examination.
They must acquire and use a PTIN, or preparer tax identification number in order to register for the test, and it can only be taken during certain times of the year.
May 1st is typically the start of the registration period for the test and many professionals buckle down with their studies and preparatory materials during the winter months in order to be prepared.
In many places, it is recommended to study for at least a year in preparation for taking the exam.
Though there are people who are able to complete the test successfully without such a rigorous schedule, such occurrences are an exception to the process rather than a rule.
The main motivation for accounting professionals to seek such a qualification is the ability to represent clients directly before the IRS.
If an individual or business is audited, then a regular CPA can file paperwork and submit information, but they cannot act as a financial representative who can speak on behalf of the company before the IRS.
Rather, the individual or business would need to find an enrolled agent, update that person on the pertinent business matters, and send them to represent the interests of the client before the IRS.
In many ways, an enrolled agent is just like a legal advocate who is bound to protect the best interests of clients who hire their services.
The two main differences between these professions is that a lawyer has full confidentiality privileges and works in the legal system, while the enrolled agent works with the IRS and only has partial confidentiality privileges with client information.
Just as lawyers have to stay current on rulings and precedent set in court decisions, an enrolled agent has to remain current on all tax code and financial requirements set by the government.
