All accounting majors - and the rest of world - seem to know about Certified Public Accountants. Going through school, through the Accounting Club, in all our classes, much of the focus is becoming a CPA when you graduate.

You already know the long, competitive road you must travel to get there. Not only do you have to work for a firm for two years, you still have to pass the exam in order to have any chance at good income and a future.

What's your other option? I'll bet no one ever told you about Enrolled Agents.

When I was in college, I'd never even heard the term. In fact, it wasn't until the year after I completed my Master's Degree that I ever even heard of this profession.

So, I'm going to tell you about the best kept secret in accounting - the Enrolled Agent (EA).

EAs are very special tax professionals. We've been around since right after the Civil War. Our license comes from the U.S. Treasury Department. So, unlike CPAs, we can practice nationally, without re-certifying or re-testing state-by-state. Like CPAs and attorneys, we are governed by U.S. Treasury Department Circular 230, the ethical bible of tax representation. Recently, through the efforts of Enrolled Agents throughout the country, we obtained permission for accountants to be able to keep their EA status when they became CPAs. (In the past, upon getting certified, accountants had to sacrifice their EA cards.)

Due to the national representation capability, many CPA's are becoming EAs. (In fact, after a seminar I recently held, I got a 'thank you' from someone at KPMG saying that she was inspired to take the EA exam that fall.)

We prepare and sign tax returns, represent the client at tax audits, intercede for our clients on collections issues, set up installment agreements and offers in compromise, sign closing agreements regarding a tax liability, Sign consents to extend the statutory period for assessment...

In fact, EAs may take the Tax Court exam and represent taxpayers before the court, without having gone to Law School or sitting for the Bar Exam. Although, I will admit, I know some Enrolled Agents whose reputations are so strong that some Tax Court judges will allow them to represent clients even though they have not taken the Exam. In short, in the eyes of the Internal Revenue Service, we are the nation's tax specialists.

a CPA. Let's face it, with hundreds of thousands of CPAs in the country, they've got a bigger public relations budget. (When was the last time you saw a Milquetoast accountant on a TV show who was an EA? No - you've seen CPAs!)

But, within the IRS? Frankly, since I spend a great deal of time in IRS offices, I have gotten to know many auditors and collections officers. We get into conversations. Many of them admit that when they see the rep's power of attorney and it says EA, they perk up a bit. The EA tells them two things

1) They are likely to be up against someone who understands the tax code.

2) They will be treated with courtesy.

IRS staff admit that, too often, when a CPA or attorney comes in they are full of ego and bluster. Some idiot must have taught them that the way to handle an audit is to be rude, overbearing and to shove their knowledge down the throat of the agent. Imagine how much the agent loves that treatment! Remember - the auditor has power and discretion in your case.

In fact, during one audit, I knew I was going to have a problem because I was dealing with an entertainment industry client with incomplete information. Right up front, I told her the limitations in my presentation. These were going to be my problem areas. And I asked her how she could help me make it work out for the taxpayer. So she helped me.

But, in the course of chatting, she told me that she had a similar situation the day before. The CPA had come in representing a man, in the entertainment industry, the son of a famous performer. He was also missing information - and tried to trick the auditor - and to bully her into giving his client credit for expenses he couldn't prove. The auditor had the discretion to insist on getting documentation - and did. But she admitted to me, "I really felt sorry for his client. If he had come into the office without his accountant, I'd have probably talked it over with him to get a feel about whether he really incurred those expenses for business. I'd have probably given it to him. But his accountant was so rude and made me so mad. Maybe I was a little more nasty than I needed to be." Can you blame her?

This is a great career for people who want independence. EA's tend not to fit into corporate modes. We live on our own schedule; get creative and artistic; write; make music, travel and shake up the world. You rarely see large firms consisting of Enrolled Agents.

This is a business that really lends itself to being run from home. This is great for students working on their degrees, single moms, actors or performers who need flexible schedules, Realtors, retirees who want to keep their brains active, CPAs who want out of the rat race, people who live in RVs and want the freedom to hit the road.

This is a profession that can be maintained with a phone line, a modem and laptop computer. You set your appointments with your clients when it suits you. You can control the size of your practice. Although most EAs work year-round, you'll find many of them are closed at least two days a week after tax season.

EAs are often gregarious, party folk, play golf, take chances, and give a great deal of personal care and attention to their clients. Often, they perform services that are entirely above and beyond the call of duty. Since so few people know we exist, EAs are often older people.

One grandma EA , named Rita, called me about a client who had had his restaurant stolen out from under him by an unscrupulous ‘investor.' As it happens, I was acquainted with that man and knew some of his shortcomings. I knew he had not dotted his ‘i's or crossed his ‘t's.' So, I told her how she could trick them into giving back the restaurant.

Rita got one of her other clients to come along with them to take back the restaurant. that client owned a security company. He brought along a couple of his biggest, meanest-looking guards. They didn't say a word, just surrounded the ‘investor' and his friends, while Rita explained the errors in their contract and why it was an invalid purchase. She pointed out that if they were to take them to court, not only would they lose and have to pay civil penalties, but, she would file charges against them for extortion. I doubt that they listened to a word she said. But, being surrounded by guards, they quietly handed over the keys and walked out.

Even our old 'fogeys' are pretty tough! But, there's lots of room for young blood in our profession. In fact, many EAs are looking for people who will stay with them for a couple of years and take over their practices. There's a lot more room for faster partnership potential with a small EA firm than there is in a CPA firm.

We are bold. We change tax policy. Either alone or together. One Enrolled Agent is practically single-handedly responsible for the IRS's more lenient policy on personal extensions being filed without any payment. It all came about when Doug Thorburn, a Northridge EA proposed the paperless extension system...but that's another story.

Depending on where you are working, EAs with solid tax experience can earn as much as CPAs. One student of mine passed the EA exam on the first try, with just a little tax preparation experience. She does not have her CPA, but Susan is the manager of a tax department at KPMG in Los Angeles - where they have their choice of all the CPAs in the world. They must think this EA is pretty hot.

Typically, EAs charge just a bit less than CPAs for professional services. Although, the more experienced ones have hourly billing rates that are higher than CPAs. I charge $150.00 per hour for consultations, audits and representation. Once CPA I just spoke to only bills $100.00 per hour.

Many EAs tend to be better at the fundamentals, like bookkeeping and payroll. For those areas, they typically charge between $25.00 and $75.00 per hour in this part of the world. Comparably less in more rural, less expensive areas.

When I started my degree in accounting, my goal was to learn to be an expert bookkeeper so I could work from home and earn $10,000 per year. Don't ask how long ago that was!

But, I was shocked to discover that the degree in accounting did NOT prepare you to really understand the fundamentals of day-to-day bookkeeping. But it does explain why most CPAs haven't a clue about their clients' down-to-earth business problems. That's why smaller businesses are often better off with Enrolled Agents. EAs have generally have real-life experience, not just book theory.

Working for a firm, you can expect to earn anywhere from $10.00 - $250.00 per hour (and up) depending on your skills and expertise. Even H&R Block will hire you for a minimum wage, a small share of your billings and some great entry-level training.

A good EA, who understands his/her clients' needs can easily create a million-dollar a year practice. In fact, as part of the guidance I give my "EA Exam Review" students, I teach them how.

It's much less work than getting your CPA. And you can do it while you're still in school.

You're already good at taking exams? All you have to is pass a really intense, two-day exam offered each fall by the IRS. No sweat. Pass the test and you're certified. No degree necessary. Even college students can become Enrolled Agents. (I've taught people with limited English and limited tax background to pass the EA exam in one summer. So you, should be able to pass - if you really cram.)

This is the time to get the application. For more details, and instructions on how to apply, visit IRSExams.com. - order it NOW.

Oh, the exam? Actually, it's not a piece of cake. You'll really have to apply yourself. There are three parts with 100 questions each. It is a very tough tax exam.

They cover -

Part I - Individuals,

Part II - Sole Proprietorships and Partnerships,Exempt Organizations,

Part II - Corporations, Fiduciaries, Estate and Gift Tax and Trust

Part III - Ethics, Recordkeeping, Procedures, Appeal Procedures,

It is NOW offered from May 1 - Feb 28 of each year.. And you are allowed to take each part up to four times a year.

Once you get certified, of course, you'll have to do CPE. The IRS expects 24 hours each year (72 every three renewal period). But the National Association of Enrolled Agents requires 30 hours. We are also bound a stringent code of ethics ... and are regulated by IRS's Circular 230, just like CPAs and attorneys.

This is the time to get the application. For more details, and instructions on how to apply, visit IRSExams.com. - order it NOW.

order all the materials in the booklet and start studying. The application book includes an order form for the materials - send it in ASAP. You will get a box of publications. There are just a couple more study tools to order.

Jim Bank's FasTax ($64.95)

This is wonderful! Jim put together an excellent study tool in his disk. It covers about 5 years worth of exams, with a testing feature to help you gauge your progress. Several of my students figured out that they can print out some of the questions and answers each day and read them throughout the course of the day. By the end of each day, they'd memorized 10 questions and answers - and could visualize them for the exam. Well worth every penny.

Gleim Publishing

Federal Tax Questions Book  ($29.95 w/software )

When I was teaching the review course, I used their Federal Tax Questions Book, which contains tax questions and explanations of the answers from all the exams that covered taxes (CPA, Bar, EA, etc.) It was cheap and handy. Now, though, they have come out with a set of books that are focused just on the EA exam. They've added software to both sets. Good tools. Good value.

The results tend to come out in about January or February. Once you pass the written exam and apply for your T-Card, there's one more test to pass. A background check. They will look to see if you are in compliance on your own tax filings; see if there you have a criminal record and generally, get an overall sense of your probity. If you've received your card, usually after tax season is over, you know you've passed - and can breathe a sigh of relief.

If you can find a review course in your area, I really recommend that you take it. It's much easier to commit to doing the homework and study assignments when you have to face an instructor and a room full of impatient students.

Some classes I know about can be found here

There may be more information here at TaxSites And I am building a clearing house for information from all the providers. Please visit EAExamCentral.com

Check with your local university. Many of them offer review courses through their extension departments. And if you find that they don't? Well, then...sounds like an opportunity for you, doesn't it? Pass the exam and be hero - create the course to help others...and develop a stream of income for yourself. What better credentials do you need? After all, you'll have passed the exam! What a way to start a practice.

Oh yes, there is a way to become an EA without an exam. Simply work for the IRS for five years in certain capacities...then, they'll just give you your EA, if you ask nicely.

Now do you understand why the CPA community doesn't want you to know about this career option? If you pass the exam, you'll be able to start earning a decent living while you're still in college. In fact, by the time you graduate, you could have a sizable tax practice of your own. Then, you'll be in a better bargaining position come recruiting time. In fact, you may decide

to skip that route altogether - and become your town's expert in taxation.

(Please note, some of my best friends are CPA's and attorneys <g>)

Thanks for coming to play with us!

copyright © Eva Rosenberg 2005-present