Top 5 Mistakes New Enrolled Agents Make
Mistakes New Enrolled Agents Make (and How to Avoid Them)
Top 5 Mistakes New Enrolled Agents Make—are they holding you back from a smoother path to success? Entering the world of tax representation as an enrolled agent (EA) can be exciting and challenging, primarily if you’re freshly licensed.
While the EA credential can be a rewarding career milestone, many new agents stumble upon the same pitfalls, ultimately costing them time, revenue, or confidence. Knowing these common missteps can make all the difference in helping you avoid unnecessary setbacks and gain traction in your practice.
Let’s dive into these five common mistakes, identify why they happen, and discuss actionable steps to avoid them. With this knowledge, you’ll be better prepared to succeed and positively impact your clients' financial well-being.
Top 5 Mistakes New Enrolled Agents Make
Mistake 1: Inadequate Knowledge of IRS Procedures
One of the new EAs' primary mistakes is underestimating the complexity of IRS processes. Many assume that passing the exam is enough, but IRS procedure mastery requires ongoing learning and consistent practice.
- Consequences: With a firm grasp of these procedures, EAs can avoid mishandling cases, leading to delays, client dissatisfaction, and even compliance issues.
- Solution: Regularly review IRS updates and attend relevant webinars to stay informed.
Did you know? The IRS regularly updates tax procedures, and missing these changes can significantly affect your client's representation.
Mistake 2: Inefficient Client Communication
New agents often need to pay more attention to clear, proactive communication. However, a lack of client communication can lead to misunderstandings, missed deadlines, or a lack of client trust overall.
- Consequences: Poor communication can break trust, lead to client mismanagement, and increase the chances of overlooking crucial information.
- Solution: Set up regular check-ins and use project management tools for organized, consistent client updates.
- Pro tip: Consider using project management software to streamline client interactions, ensuring nothing slips through the cracks.
Mistake 3: Not Specializing in a Niche
Many newly enrolled agents think it’s best to be a generalist, taking on all tax issues. While this may seem beneficial initially, it can lead to burnout and dilute your market positioning.
- Consequences: Without a specialty, standing out in a crowded market is challenging, which can affect your ability to attract and retain clients.
- Solution: Identify a niche within tax representation, such as small business taxes, international tax law, or individual income tax. Specializing allows you to develop deep expertise, giving you a competitive advantage and making your services more appealing to a targeted client base.
- Example niches: Business tax consulting, tax preparation for freelancers, or IRS audit representation.
Related reading: How Long Does It Take to Become an EA?
Mistake 4: Overlooking Continuing Education Requirements
The IRS mandates that EAs complete several continuing education (CE) hours annually. Yet, many new agents must fulfill these requirements or choose low-quality courses, leading to potential compliance issues and skill gaps.
- Consequences: Please complete CE credits to ensure your EA status is maintained. Additionally, low-quality CE courses can leave you underprepared for real-world scenarios.
- Solution: Set a CE plan for the year and schedule time each month for professional development. Choose reputable CE providers and look for courses that align with your career goals and client needs.
- Pro tip: Some top enrolled agent courses can help you track CE credits efficiently.
Further learning: Check out our product on the Enrolled Agent Course for a comparison of top options.
Mistake 5: Neglecting Marketing and Networking Efforts
New agents often believe that clients will come automatically once they’re certified. However, finding clients can become an uphill battle without an intentional approach to marketing and networking.
- Consequences: Lack of visibility in the marketplace can lead to fewer clients and slower career growth.
- Solution: Dedicate time weekly to marketing your services and networking within the industry. Use social media to showcase your expertise, attend tax seminars, and join local or online tax professional groups to build a referral network.
-
Marketing Ideas:
- Build a professional website to showcase your services.
- Join LinkedIn groups relevant to enrolled agents and engage in discussions.
- Write guest posts or contribute to industry blogs to boost your visibility.
Quick Tips to Avoid These Common Pitfalls
Here’s a recap of how you can succeed as a new EA:
- Stay updated on IRS procedures with regular training.
- Prioritize client communication for clarity and trust.
- Specialize to stand out and attract your ideal clients.
- Complete CE credits on time with high-value courses.
- Dedicate time to marketing and networking each week.
Related Articles to Explore
Questions? Answers.
To become an Enrolled Agent, you must:
- Pass the Special Enrollment Examination (SEE), which is a three-part exam covering:
- Alternatively, if you have experience working for the IRS (at least five years in a relevant tax position), you may qualify without the exam.
- Apply for enrollment by submitting Form 23, “Application for Enrollment to Practice Before the IRS,” and undergo a background check to ensure you comply with tax laws.
The SEE is a three-part exam that tests your knowledge of tax laws and your ability to represent taxpayers before the IRS. Each part of the exam focuses on different aspects of U.S. tax law:
- Part 1: Individual Taxation
- Part 2: Business Taxation
- Part 3: Representation, Practices, and Procedures
You must pass all three parts within a two-year period. The exam is administered by Prometric and is available year-round.
To renew your EA status, you need to:
- Complete Form 8554, “Application for Renewal of Enrollment to Practice Before the IRS,” and submit it before the expiration of your current enrollment cycle.
- Confirm you have met your CPE requirements for the three-year period.
- Pay the renewal fee (currently $140 as of 2024).
Your renewal period is based on the last digit of your Social Security Number:
- 0, 1, 2, 3: Renew by January 31 of years divisible by 3 (e.g., 2026, 2029).
- 4, 5, 6: Renew by January 31 of the year following those divisible by 3.
- 7, 8, 9: Renew by January 31 two years after the year divisible by 3.
Yes, an EA can lose their status for various reasons, including:
- Failure to meet CPE requirements.
- Failure to renew your enrollment by submitting Form 8554.
- Unethical behavior or violations of IRS regulations (e.g., tax fraud, negligence).
If you lose your status, you will need to reapply and, in some cases, retake the SEE to regain your credentials.
It’s important to track your CPE hours to ensure you meet the requirements. Many IRS-approved providersautomatically track your hours and issue certificates for each course. You should:
- Keep a record of completion certificates from each CPE course.
- Use a spreadsheet or online tracking tool to log your hours and ensure you meet the yearly 16-hour minimum.
Some CPE providers offer dashboards that allow you to track your completed courses and hours in real time.
While both EAs and CPAs can represent clients before the IRS, there are key differences:
- EAs specialize in tax and have unlimited practice rights to represent taxpayers before the IRS in tax matters.
- CPAs can offer a broader range of services, including auditing, accounting, and financial planning. However, their ability to represent clients before the IRS in tax matters is typically limited to those for whom they have prepared tax returns or provided other services.
EAs are generally seen as tax experts, while CPAs have a more generalized accounting background.
Form 23 is the “Application for Enrollment to Practice Before the IRS.” You file this form:
- After you pass all three parts of the SEE, or
- If you qualify based on prior IRS work experience (at least five years in a relevant position).
Filing Form 23 is the final step in becoming an Enrolled Agent. You must also pass a background check and pay the initial enrollment fee.
- After passing the SEE, you must submit Form 23.
- The IRS will conduct a background check to ensure you have complied with U.S. tax laws.
- The approval process typically takes 60-90 days, depending on the completeness of your application and the IRS's review workload.
We have addressed most of the EA questions in our blogs. Refer to these blogs
Here are all the relevant resources you can use to pass the exams
- Enrolled Agent CPE Requirements: Complete Guide for EAs
- Enrolled agent diagnostic report: How to use it
- Enrolled Agent Exam Centers in India: Complete Guide
- Enrolled Agent Exam Cost: A Complete Breakdown
- Enrolled agent exam retakes: Study strategies
- Enrolled Agent Exam Sample Questions: Part 1 Individuals
- Enrolled Agent Exam Scores: Everything You Need to Know
- Enrolled agent exam time management
- Enrolled Agent Exam: Your Complete Guide to Success
- Enrolled Agent Renewal: Complete Guide to Renew Your EA Status
- Enrolled Agent Salary in India: A Complete Overview
- Enrolled Agent Study Plan Strategies
- Enrolled Agent Syllabus: Complete Breakdown for 2024
- Enrolled agent test preparation
- Enrolled Agent: Your Guide to Becoming an EA
- How to Fill Form 8554 for Enrolled Agent Renewal
- How to get a PTIN: Step by Step guide
- PTIN Renewal Deadlines: What Happens If You Miss the Deadline?
- Enrolled agent course
Leave a comment