This Indian CA has been working in US Outsourced Tax Industry for a decade. He explains how you can become an Enrolled Agent.

• CA Gaurav Daswani, unlike most CAs in India, decided to go into US taxation full-time.
• After 11 years in this field, he recently completed his Enrolled Agent (EA) examination.
• He demonstrates why an EA license can give you a boost in your career in tax… and how you can pass the exams by SELF STUDYING.
• Here are the excerpts from the interview.

What factors led you to pursue a career in the field of US taxation?

When I became a Chartered Accountant in 2011, little did I know that I would find myself working in the US tax preparation industry.

However, an offer from a US-based Knowledge Process Outsourcing (KPO) firm in the offshore industry quickly changed that. They invited me to join their Accounts and Taxation department in the US.

Since I was unaware of the US Accounting and Tax outsourcing industry I first searched on Google. I decided to take a chance and joined them as an Associate US Tax Preparer. 

After five years of studying CA and being bored with traditional tax and audit assignments, this was a change that I enjoyed.

In 2015 I did make a switch to Finance and Accounting, but within 3 years I returned to doing tax return preparation. I have not looked back ever since.

I joined a boutique tax accounting firm specializing in international taxation for expats and international entrepreneurs. Back then it was a small firm of 5-10 people. We were a team of six, working as tax preparers and reviewers.

Recently, I read on the news that nearly 300,000 Accountants and Auditors have left their jobs in the past two years.

Many US CPA firms are now outsourcing Accounting and Taxation work to India. Some firms with 8-10 team members are even hiring Accounting and Tax experts directly rather than through outsourcing. Why? because the firms can get the work done with fewer wages.

This has caused many Finance Professionals in India to become Enrolled Agents (EA). Having been in this industry for twelve years now, I too completed my EA course with IRS.

I have already started with client consultations and representing the taxpayers before the Internal Revenue Service (IRS). Maybe next year I will be promoted to a manager position so that I can sign the tax returns.

How to become an Enrolled Agent in the USA from India?

The Enrolled Agent (EA) certification program is offered by the Internal Revenue Service (IRS) in the United States.

The IRS, or Internal Revenue Service, is a government agency in the United States tasked with the duty of collecting taxes and enforcing tax laws

The course is designed to provide in-depth knowledge of tax laws and regulations in the US. It will give you the ability to represent taxpayers before the IRS for audits, collections, and appeals.

You can prepare, take exams and obtain the EA license remotely, which makes it a convenient option for those in India. And there is no requirement to possess a specific degree or fulfill any experience criteria.

There are certain steps you have to follow to get the qualification.

It starts with:

Obtaining a Preparer Tax Identification Number (PTIN):

• You need to go to IRS’ website and look for the necessary documents that are required, such as your Social Security Number, and Personal information among others.
• The next step is to create your account, apply for your PTIN, and pay the application fee of $30.75.
• The PTIN will be delivered to your PTIN account.

Schedule your Enrolled Agent exam:

• Visit Prometric’s webpage to schedule your Special Enrollment Examination (SEE) dates.
• The Enrolled Agent exam contains three parts, and you have to pay a fee of $203 per module.

Pass the exams:

• The three exam modules include

1. Individuals,
2. Businesses and Representation
3. Practices and Procedures.

• If you fail one, you have to pay $203 again to take that exam.

Apply for enrolment to practice before the IRS:

• Once you have passed the SEE, you can apply for enrolment by completing Form 23 and submitting it to the IRS along with the appropriate fee, which currently is $140.
• You must also pass a background check that includes your income tax history and criminal record.

Could you give us detailed insights into the Enrolled Agent Examination syllabus?

The Enrolled Agent course has three parts of exams.

Part One:

• This part covers individual taxation, which has 8-10 topics and starts with the basics such as filing status and base.
• Unlike in India, personal tax returns can be filed even as a family in the US. Filing categories include single, head of household, married – filing jointly, married – filing separately and widowed.
• Other topics that you would learn in this part include the type of income, tax credits, deductions, and adjustments to income.

Part Two:

• This part covers business returns for partnerships, LLCs, S Corp, C corps, specialized business returns, and specialized returns.

Part Three:

• This part covers representation before the IRS which shows you how to proceed with notices and appeals, completion of the filing process, practices, and procedures.

The exams are held from May 1st to the end of February of the following year.

Exams in India are held in four metro cities, including New Delhi, Bangalore, and Ahmedabad.

The exam for each part has 100 multiple-choice questions. You just have to finish your paper and click the submit button, you’ll get your result in real-time.

You have the option to either appear for all three parts at once or take them one by one.

What was your method of preparing for the Enrolled Agent exams?

We can self-study for the exams and that is what I did! So you can avoid coaching altogether…Your experience will help here.

All the study materials are available online, from prerecorded video lectures to relevant books from various authors in the US.

If you have any confusion, you can always find study materials and review courses from various course providers. Many institutes and online coaching websites in India teach this course nowadays.

Here is how I prepared for the exams.

• I paid for a set of question banks that had approximately 2000 questions. I also bought some other paperback books that amounted to 800 USD.
• Before taking the exam for each paper, I typically studied for two to three hours per day, five days a week, for one to two months. 
• I successfully passed Part 1 in 2019. But due to the Covid lockdown, exam centers in my city were not conducting the exams. I had to wait for two years before writing the exams for Parts 2 and 3.
• I passed the final part of the exams in October 2022.

It is recommended that you pass all three parts of the exam within two years.

It’d be comparatively easier for CAs to clear the exams in 6-12 months as the fundamentals of tax are the same. However, it would also depend on their circumstances and work schedules.

What are opportunities for Indian Finance Professionals in US Taxation? How can they find those opportunities?  

There are many opportunities available in the US taxation market. And it is increasing.

The market size of the US Tax Preparation Services industry, measured by revenue, is $14.4bn.

• Typically, in India, individuals file their taxes, but in the US, many people seek the assistance of CPAs or EAs, due to their complex procedure.
• And the work doesn’t just end with the conclusion of tax season. People often appeal for an extension of 6 months for tax filing.
• There is off-season work, such as streamlined filing (US citizens who haven’t filed their returns in the past few years require assistance).
• That is why we receive taxation work throughout the year. But the most intense work period lasts 4-5 months.

A US Tax Reviewer with 5-6 years of experience can earn INR 20-25 lacs per annum in India, while CPA firms may pay around INR 30 lacs to someone with 7-8 years of experience.

How you can find opportunities:

• The very basic requirement for becoming a tax return preparer in the US is a degree. You need to either be an EA or CPA.
• The EA credential, along with client communication and tax research skills are the key factors to start working with international tax firms.
• The second step is to gather practical experience, expertise, and communication skill. Gain as much taxation knowledge as possible because the EA course doesn’t cover everything.
• Your third step would be to join a BPO company that works for US CPA firms. These companies will employ you and offer an annual salary.
• Another opportunity is to get employed directly by a CPA firm. For this, the CPA firms in the US look for the CAs and EAs with at least a few years of experience & areas of expertise (business, taxations) and connect with them. Generally, they offer slightly higher salaries to start with.

Wrapping up…

Despite being unfamiliar with the industry, I accepted a job offer from a US-based KPO firm and found a new passion in tax preparation.

I wouldn’t have known about the growing trend of US CPA firms outsourcing accounting and taxation work to India otherwise. And I am happy that I took the chance.

So if anyone is looking to switch careers and become a US Tax Preparer, the process is easy. Acquire the EA license and do something that you enjoy.

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