Enrolled agents are independent tax preparers who are licensed by the IRS. They earn more than other tax professionals and have more job security than other financial workers. So, how hard is the enrolled agent exam?
Compared to other professional exams, the EA exam isn’t difficult, but it’s not easy either. Hence, being well-prepared for it ensures you’ll have an easier time learning the material and answering questions correctly when you take the exam. Now, how to pass the enrolled agent exam?
- Sign up for a credible EA review course
- Stay abreast of any new material released by the IRS.
- Know the fundamentals of tax laws along with all the basic formula
- Master time management using timed practice exams
- Know what to expect on exam day
(Source: ILead Tax Academy)
So, whether you’re taking the Enrolled Agent (EA) exam as a stepping stone to be an IRS tax auditor or you’re just curious to see if it’s possible to pass this seemingly impossible test, you should know what to expect.
Contents
Overview of the Enrolled Agent Exam Content
The Enrolled Agent exam is an IRS-administered exam that tests your knowledge of federal income tax law. It also evaluates your understanding of business and accounting principles necessary for preparing U.S. federal income tax returns.
How hard is the enrolled agent exam? Let’s look at the content.
The EA exam is divided into two sections: a multiple-choice section and an essay section. The sections are related to your knowledge of tax law and the Internal Revenue Code.
The Enrolled Agent exam consists of three parts, as follows:
EA Exam Part 1
This exam focuses on taxation for Individuals and is comprised of five sections with approximate question weightings:
- Preliminary Work, Taxpayer Data (17)
- Income and Assets (21)
- Deductions and Credits (21)
- Taxation and Advice (14)
- Specialized Individual Returns (12)
EA Exam Part 2
This exam section is primarily focused on business taxation and covers the following three sections:
- Business Entities (28)
- Business Financial Information (39)
- Specialized Returns and Taxpayers (18)
EA Exam Part 3
This section covers Representation, Practices, and Procedures under four sections:
- Practices and Procedures (25)
- Representation before the IRS (24)
- Specific Types of Representation (19)
- Completion of the Filing Process (17)
Each part of the EA exam contains 100 multiple choice questions, totaling 300 questions, with 3.5 hours to complete each of them. The questions are in the form of direct queries, incomplete sentences, or “all of the following except” kind.
People who have never studied tax law have difficulty passing the exam on the first attempt, which can be discouraging. However, there is good news for them.
Unlike other professional exams where you’ll have to wait till the next testing window to retake an exam, the IRS allows candidates to retake any failed part within 24 hours so that you can take the EA exam four times in one testing window. If you pass any part of the exam, you can carry over the passing score for that part for up to 2 years.
What Do the EA Exam Pass Rates Tell Us About How Hard The EA Exam is?
The IRS uses a scaled score to grade the EA exams and has set the passing score at 105 per mandate. Hence, the average pass rate for the Enrolled Agent exam is 71%.
Meanwhile, the average pass rate over six years (2015 to 2021) is:
According to the historical pass rates, exam takers find Part 1 to be the most difficult with only approximately 66% passing it as of the 2020-2021 session.
Part 2 of the EA exam is also challenging, with approximately 74% of candidates passing it in recent times.
The least difficult part of the EA exam is Part 3, with pass rates consistently above 80%.
Although candidates can take the EA exam in any order, most prefer to start with the easiest parts and go on to the more difficult ones.
What People Say About the EA Exam (Social Media)
If you want to know more about how to prepare for the enrolled agent exam, research the EA exam and EA review courses on social media like Facebook and Twitter.
Here are some things people generally discuss how to prepare for the enrolled agent exam on social media:
Q: What’s the Best CRM & Online Based Tax Application if we have to run Tax Preparation Practice Virtually and Online?
A: I like Click up. It helps you manage both simple and complex projects with a lot of dependencies between tasks.
Q: I have scheduled for the part 1 exam. Is Passkey sufficient for preparation?
A: Yes. I studied the videos. I made sure I understood everything. Make sure you understand every chapter and practice the test. If you have experience working with individual tax, that may help. But the videos are very close to the test.
Q: How many days did you prepare for part 1, and how much percentage did you get in the passkey practice test?
A: It took about 2 months, took the test several times with each test at least an 80. Would recommend reading the IRS publications on topics you’re having trouble with.
How to Study for the EA Exam
If you’ve decided to start preparing to become an Enrolled Agent, that’s a big step toward working in public accounting as one of the nation’s most highly trained tax professionals.
Let’s walk you through 10 tips on how to study for the EA exam to prepare and do well on the EA exam. No matter how hard the enrolled agent exam is, following these steps will surely make things easier.
- Set aside at least 20 minutes each day for study sessions.
- Have all your books and other materials like flashcards in one place.
- Stick to a routine such as studying before breakfast and then again before dinner
- Make sure you take care of yourself; sleep well and eat well
- Take care of any personal business, so it doesn’t distract from your studies
- Track how much time you spend studying each day
- Reward yourself for sticking to your schedule
- Find another person who is also working toward the exam and study together
- Set aside an hour or two every weeknight to study instead of watching TV or scrolling through social media.
- Focus on what’s important and not just what’s new. If there’s a particular topic you feel you need more practice with, try adding more hours per week to focus exclusively on that subject.
How to Make the EA Exam Less Difficult: Use EA Review Course Help?
EAs are well-versed in tax law, which makes them ideal for preparing and filing taxes. The test covers a wide range of topics, including tax accounting, ethics, and federal taxation.
While the test may seem intimidating at first glance, enrolling in an EA review course can help to make the process much easier. An enrolled agent course online can make studying more manageable by providing a study outline and sample questions.
Students often find themselves overwhelmed with all the information required to pass the exam. An EA review course provides a plan that outlines what they need to do, when they need to do it, and how much time they have left until their next exam.
Some enrolled agent courses online even offer one-on-one tutoring sessions or group discussions where students learn from each other’s experiences.
Enrolled agent courses online are an excellent way to boost confidence before taking the exam. They help students spend more time on certain subjects if they feel unprepared.
Bottom Line
So, how hard is the enrolled agent exam?
The test is rigorous but not impossible. Many study materials are available to help you prepare for the exam, and there are many different ways to get ready for the EA exam. If you put in the time and effort, you will be able to pass the test on your first try!
