Discussion:EA Exam

I'll use this study time to reflect and find my 'inner tax practitioner'.

Unlike CPA, most people (clients) don't know what EA stands for. Enrolled is easy, but once you utter the word Agent people tend to couple it with IRS and the room gets very quiet. You can see the wheel turning in their heads as they think you are and IRS Agent...and they just mentioned 'off the books'.

With any luck, a few of my problem clients will either be scared straight or take a hike.

I spent $270 for the books and test cd (3 parts). I opted out of the online option...it's the same as the CD minus the online counselor.

Good luck with your studying and with the test.

The new test does not rely on the old test - all of the questions are new, though some may be similar. The old questions were written by IRS employees. The new questions were written by practicing EAs who want you to have a certain level of competency before admitting you to the tax expert "club".

All in all it's staring to get fun (isn't that sick?). Well, it's back to books

- Rick

Good luck with your studies!!!

I found that the 3rd part contains comparatively less questions than the other two. The 3rd part has just 186 questions in total, when the second part has over 400 (not the book it self, but the software). Does it mean that the third part is not that difficult? (I wish!)Or if my version contains an error? I past the first and second parts recently, which were not that bad. I think that the WiseGuide helped a lot. I am taking the third part next week, and I feel completely lost since I don't have any experience in this area.

The trickiest part for me was figuring out all the SOLs for refunds.

EA Subject Matter Experts are currently writing some new questions as Prometric will rotate the question pool.

DO let us know when you pass all 3 parts and PLEASE give us feedback in comparison with the CPA exam that you have passed.

If the EA exam is so easy, I would think that a CPA could challenge it without having to study. If the CPA exam were easy, there would be a lot more CPAs. Both are difficult.

I wanted an opinion of "here's how they are different" and "here's how they were the same".

John Huddleston

Wonderful analogy, Kevin!!!

Interestingly, from the recent stats I've read, the section of the CPA exam that has the lowest pass rate is REG (Regulations) which contains federal taxation.

I always stay away from the we/them controversy. To me, it boils down to the person and not the credentials. I know CPAs and EAs who are absolutely brilliant. I also know CPAs and EAs that, for the life of me, I don't know how they could even pass a driving test.

GAAP was rated number one and the logic is you can't apply tax or audit work to a transaction you don't understand. A capital lease is a perfect example. You can syudy it all dau long but simply miss it when preparing a tax return. Thus whether you are a CPA or EA is arguably secondary to your ability to understand business transactions and people.

Not sure what's on the EA exam but I agree with Thinktax, I have met many awesome tax pro's both CPA's and EA's and many knuckleheads who were CPA's and EA's.

Think about this theory, if you are on TA a few times a week, you are at a minimum curious abot your profession. More than likely you enjoy the profession. That is what helps build skill. I have had several CPA's work for me that were not intuitively curious, received all their training from mandated CPE and their compensation showed it.

Also in response to SouthParkcpa; I've been an EA since April '06, and love the challenges of the profession. Met many EAs that don't know jack about tax law, and a few CPAs where I needed to fix there work. I know basic accounting (took I and II), but I don't know jack about GAAP. Do you think I could get a lot out of it? Let me know...

Thanks,

Mike G.,EA

Not sure why a CPA would take the EA but it's like good soup, Can never hurt! That said........

My practice and focuses on businesses and their owners with sales between 1 mil and 10 mil. As such, whether I like it or not I am confronted with consolidations, mergers, sales, new partners, LP's strange bank financing etc... My favorite saying is that 70 percent of what I do can be done by a 2nd year guy. The other 30 percent is the tough part. Meaning, as you grow, you will be confronted with issues you can't avoid. The last 3 years in my practice have been spent ridding ourselves of work we shouldn't do (small 1040's and corps, write up, local tax work etc...).

In my experience, the 3 classes I highly recommend is Intermediate I and II for the more in depth review of

the BS and P and L  and Business law I.  Contract and employment law are key in my view to good tax work. This is just one opinion. 

By the way, I am originally from Long Island as well. My masters is from CW Post.

Matt

I got Bus Law I already, great course! My Intermediate Accounting book is sitting on the shelf. I might just sit down and crack it open...

By the way; what's BS and P and L?

Thanks,

Mike

Balance sheet and Profit and loss

Not sure what you mean by nice friggin school. Sarcasm? Post is OK, not great..............

Matt

The sentiment above is really great concerning the depth and bredth of the two exams. A mile wide and an inch deep vs. a quarter mile wide and four feet deep. I'll have to borrow that.

I truly only need the EA, but the public recognition regarding the CPA "brand" will further my practice - and my fees. I look forward to the day where both are equally respected by the public for the two separate functions (assurance vs. representation) that they serve.

Aaron

http://www.irs.gov/taxpros/agents/article/0,,id=109302,00.html

Some of the classes/guides/CD/Online help seem a little cost prohibitive. Not sure if appropriate but can one acquire some these study guides second hand? Thanks all!

http://www.prometric.com/NR/rdonlyres/eajqgs36mjpozcwifkywhkke7iuekusbuncejvfhis75itq3d46jzhzilg2ov7u5nznnwki2rw5rf5jgg6jopl7nlhb/IRSCIB20071126.pdf

I found this a heplful link with lots of info. Again, good luck!

I will say that having to restudy for those two sections was a pain but I did find the part two a lot easier! I became official this year!

Unfortunately, for me, what I discovered is that not having my CPA is causing me to lose clients that I could otherwise have. So, now I have a goal to get back to school and get it done.

Gleim study is the way to go and is what I have used. Books and CD with test questions only.. all else seems not necessary.

Keep in mind I do have two full seasons of tax work going into these exams.. also a CPA.

And she's using Gleim. Gleim got her through the other 2 parts.

I found certain questions on EA exam where not even covered by Gleim.. Overall you are getting enough of the exam topics to be able to pass. I still would recommend Gleim.. I have done all the online updates so don't give me that tip.

Well - the answer is simple. If you anything at all about this country's accountancy laws, you'd know that the CPA credential is a STATE license. The EA is a FEDERAL license. Not every state has reciprocity with respect to recognizing another state's CPA license - whereas the EA is recognized all over the country.

So - if at some point in the future you wish to move to another state and still wish to have gainful employment without having to go through the licensing procedure a second time, the EA license provides you that mobility.

Coming from an engineering/programming background (B.S. in Electrical Engineering and M.S. in Infromation Systems) I cannot take the CPA exam based on the educational requirements. I don't have enough credits or non at all in accounting, business or taxation at the college level. I have been preparing income taxes for 10+ years and will be taking the EA exam later this year.

As most folks said in the post, CPA name recognition is key for higher fees. The setback is if you move to a different state you may need to sit for the exam again.

That's not really the case. Most states, if not all, have reciprocity rules.

Parts 1 and 3 held no surprises. Part 2 asked for several Form numbers, stuff I would know if I had any real experience.

Other than that I passed each Part, I have no idea how well (or poorly) I did since Prometric doesn't tell you.

they really are looking for monetary/trust/ethics convictions

It is unlikely, I think, that a first offense DUI will keep OPR from issuing your Treasury card. However, should they decide against you, you need a solid record for appeal to the Secretary (I think it is). The thing you need to show is that this was an isolated incident, that you have learned from your mistake, and that you don't require a further period to demonstrate "rehabilitation" before you can be trusted with enrollment. Showing them what you've done about it will help a lot.

Finally, if you do need to appeal a denial, spend the money for a decent administrative law lawyer. This is no time for DIY. Even if you aren't all that anxious to be enrolled, OPR's denial will become part of the record you will have to explain whenever you seek any other government license in the future.

Yes, I have wondered about the background check myself. I just became a permanent resident less than a year ago, and I guess that they can't really see much about me (except one tax return and a newly created credit).

How long does it normally take for them to do the check?

I suspect that the background check is a "no news is good news" sort of thing. If they don't know much but what little they know isn't negative, they'll issue the card.

As for my test experience, I've been working in individual taxes for the last 8 years. The individual and the review part was pretty simple. Took one in Nov 06 and the other in May 07 and the business in Oct 08.

I studied from the Gleim course review. It was very helpful, & I can say that most, if not all (at least 75%) of the questions at the test were almost the same or very simillar to the practice questions in the book/CD. The CD has more questions than the book. The business section was slightly harder but again, I would say, you need to complete the entire book and then do all the question and you should be fine. I sat once for Indiv and review since I was very comfortable with that. As for business, I took it twice with 1 week gap between the two. I just wanted to take it to see what kind of questions and if I needed more preparation (I was exactly half way through my studying at that time). Based on the results, I did pretty well for just completing half of the coursework. Came back, studied for a week (4-5 hrs a day) and finished the entire coursework and also, did 85% of the questions from the Gleim CD. Took the test 1 week later and it was pretty simple. All in all, I would say, try using a course review (Gleim worked for me), but make sure to stick to the plan and finishing the practice questions. You dont really learm much from the 4/5 pages of outline, but more so from the questions (when you get it right, read the other answer options to see why they are wrong, & when you get the answer wrong, read why they were wrong). Basically, it took me 3 to 4 hours for each topic (outline & practice questions). Business had 20 units.

Anyway, DUI doesn't appear on the list at all (though if you have enough of them to reach felony status, that might be a problem). So relax, put your feet up, and enjoy a (root)beer!

Congratulations!

I got my last two exams later this week (Thursday and Friday). I am so impatient to have it done!

Congratulations!

I did recently pass an Income Tax I and II course in college that was using current information used on this years test, and, am using that text book as a secondary source of studying. Because of that Phoenix can not take the full credit for me passing all three tests (provided I do pass all three).

Forms that came up were would a prohibited retirement trx be reported.. what is the answer on this?

I mailef form 23 in yesterday to CA address as indicated in form 23 instructions.. keep in mind this form was just recently revised so perhaps new mailing address reflected on the Oct 2008 version.

One thing that surprised is that there were fewer questions that really involved using the online calculator.. most were conceptual. I honestly expected to see more with a degree of problem solving and requiring the calculator. Not complaining .. just making an observation.

So Vermontcpa is maybe earning some cheap insurance! (And learning basic basis ;-])

I don't believe that there are any other materials on the sites. I have to say, too, that trying to prepare for the SEE using the forms and publications is probably a false economy. Part of preparing is learning how to answer the kinds of questions IRS asks.

This is especially true since the SEE has a "nondisclosed" question pool. You need a structured approach to review such as a commercial prep course. You won't get there just by studying old exams. For one thing, those old questions are getting pretty out-of-date.

It CAN be pricey, no doubt. I think Gleim gets about $700 for their course. Phoenix Tax relieved me of about $350 total. But the SEE exam itself costs about $300 total if you pass everything on the first attempt. Retakes add up quickly in money and time not to mention frustration. You might well end up taking a prep course after failing the exam the first time around. And LOTS of people do fail the first time around...

what do you think?

You left us all hanging! I had to go to your profile to see that you passed all three Parts! Congratulations!

They don't need a copy of your green card. They can just look you up.

Kidnap, I think that Gleim study is a great choice.

Lambers has review questions from 2006 (all 3 parts ) which I found helpful in studying for the exam. Best of all it's free.

I was a bit confused by your post until I realized that the review questions from 2006 are free but the regular Lambers review course is anything but.

Can anyone give any insight to my "strategy"? I wanted to get part 3 done ASAP and only have part 2 to focus on. Part 3 according to Gleim's prep seems pretty easy but a lot of opinions on the matter. Thanks all. This forum has been really helpful for me.

Part 3 is the easiest of the three and you shouldn't have any trouble getting through it so long as you understand Cir. 230 and the various penalties, when they apply and how to figure them.

Part 2 presumes that you know something about business law, accounting and finance. Not a lot, not as much as, say, a CPA, but you need to understand the difference between capital assets and inventory, stuff like that. Mostly, you need to know what it is that the tax code is addressing. I recommend that you periodically revisit the syllabus for Part 2 and make SURE that you have studied every entry on it.

Good luck!

Part 2 was basically keeping Partnerships, Corporations rules straight in your mind..I had side by side notes to make sure I know what is what...they do not tell you the score but I felt like I did very well..there were lot of questions on PSC and Basis in partnerships and C Corps (as far as I can remember)...there were some general questions like 941 and 940 filing requirements which we know any ways as we do it all the time.. After I pass part 3, how do I get my EA number...is there any form that I need to send to IRS...thanks for your input and I was well prepared for the tests..

Seriously, you need to study the practice and procedure rules of being an EA, most of which are found in Circular 230.

Do study for Part 3. The exam cycle ends February 28 and after that, you'll need to wait until May to take it again.

Overall pass rate on Part 3 is a little less than 80%. You'll probably do fine but people DO fail.

I'd recommend getting some more clients!

The author says that there is a substantial market for these services and gives tips on getting started.

I've seen EA fee schedules as high as $250/hour for representation but here in New Mexico, few lawyers could get away with charging that much. I don't know what CPAs get but they don't come cheap, nor should they.

Spring - lots more questions on things NEW, like babies, and the related child credit, EITC, and dependency questions.

Summer - well, that's the time for June weddings, so you'll see lots of questions on MFJ vs MFS filing, injured and innocent spouse, and, unfortunately, divorce and alimony.

Fall - Tax loss harvesting comes to mind, of course. Probably other Sch D items like wash sales, although that topic also comes up for Spring cleaning.

Winter - that's the season for representation questions - how do you properly represent a taxpayer whose deductions are skating on thin ice, for example.

What I meant was do they have a different approach at the beginning of a new season. Has anybody noticed along the years if they changed/improved/turn around. For example maybe they focus more on the new rules of 2008 ( in terms of numbers, new allocations, amount on personal deductions etc etc) in the first months. Asking never hurts.

As i stated in a previous post I'm from Romania and I'm taking this exam because there are a lot of romanian students working/paying taxes in US during a summer. So there's a market here. Recently an agency has started to do returns for some students without having the right to practice before IRS. They simply collect W2 forms, charge students and provide them the service of tax refund. Is this legal? I know for a fact they even use their own address as a shipping address to collect the checks IRS sends while issueing a refund. If this is not legal, where can I make a legal complaint? I mean, I don't think that is correct that I'm going through all this process of taking a license for a right to practice and somebody else can do it just like that. Any opinions?

Is it legal what they do right know? Charge the students, collect IRS checks, make the students agreement under which they charge people, all without being an agent? And being out-of-country. I know for a fact they call IRS everytime there's a problem with a student's refund and claim they are that student and try to solve the problem.

From my point of view this is completely illegal and I would like to know where I can make a legal complaint.

Remember that your point of view rarely matters with regard to the law.

"If you want to allow a friend, family or any other person you choose to discuss your 2008 tax return check the “Yes” box in the Third party Designee". But if you want to allow the paid preparer who signed your return to discuss it with IRS, just enter Preparer in the space for designee's name. ....You are not authorizing the preparer to receive any refund check, bind you to anything( including any additional tax liability), or otherwise represent you before IRS."'

Additionally, I read from from NY 203 I intructions forms.

"If you want the designee to performs those services for you ( the above ones) you must file form POA-1 , Power Of Attorney. "

Back to IRS website, about Power Of Attorney Topic 311 - Power of Attorney Information

If you want someone to represent you before the IRS on a Federal tax matter, file Form 2848 (PDF), Power of Attorney and Declaration of Representative, with the IRS office where you want your representative to act for you. Your representative must be a person authorized to practice before the IRS. Your signature on Form 2848 allows the individual or individuals named to represent you before the IRS and to receive your tax information. Refer to Topic 312, Disclosure Authorizations, if you want to allow a person to receive your tax information, but do not want this person to represent you before the IRS. So, as I see it, it is illegal to receive check refunds, bind people through a contract unless you're authorized to to such a thing, and represent people within IRS without the power to do so. This is more striking since it's a out-of-country situation and rules are less permissive.

What do you say? Is it legal what this agency is doing?

What can I do as a future EA to stop them? Where can I make a legal complaint?

I am seriously considering sitting for the EA exam. I am CPA and JD and think this will really set me up to start my own practice limited to taxes. I want to know the "best" study course to take and why. In addition, I want to ask everyone how much time I should expect to spend studying each night to ensure I pass each part of the exam.

Thank you in advance for your input.

Highcard

Is the 2nd or 3rd try test exactly teh same as the 1st try test? or there is a question pool with more than 100 questions and in each test the questions are random pop up?

thanks,

No, Crow, it's not like the Mile High Club.