| Enrolled Agent Inactive status | | Print | |
How do you become inactive?Voluntarily electYou can request to be placed on inactive retirement status when you fill out your renewal form 8554.
Specifically, you mark a checkbox in Part 1 of the Application for Renewal of Enrollment. The checkbox states “I want approval to remain or be placed into Inactive Retirement status.”
Involuntarily electYou will be automatically classified as "inactive" if you fail to:
What happens if you fail to meet the conditions of renewal?The Office of Professional Responsibility will notify you by first class mail. The notice will describe the reason for denial of renewal. You will have 60 days from the date of the notice to reply and provide information for reconsideration.
Common problemsA common problem that we have seen is the EA has moved, but forgotten to provide a change of address to the OPR. Then not only do they not receive the renewal form, they also do not receive the notice of non-renewal. By the time they realize they have forgotten to renew their EA license, it is often past the 60 day correction period. In this case, it is necessary to file a new application for renewal.
ExampleOne of our students selected Inactive Retirement status on his renewal form because he was not actively working as an Enrolled Agent, and he thought he could avoid the continuing professional education requirements by becoming inactive. Our student received this letter when he selected "inactive status" on his renewal:
--Click to enlarge  When he received his next renewal notice, he decided to become active again. At this point he contacted the IRS to find out if he could just select “active” and pay his renewal fee. Unfortunately, he found out that he needed to make up the last 3 years of CPE in order to renew. He had to complete 72 hours of continuing professional education in a short time frame—which of course is much more difficult than completing 24 hours per year in the normal timeframe.
Who cannot select Inactive Retirement statusIf you have been disciplined by the Office of Professional Responsibility, Inactive Retirement status is not available to you.
Maintaining your Inactive Retirement status--Use Form 8554 Application for Renewal of Enrollment to Practice Before the Internal Revenue Service--checkbox “I want approval to remain or be placed into Inactive Retirement status.” This renewal form is due every three years based on the last number of your social security number, whether you are active or inactive.
RestrictionsYou are ineligible to practice before the IRS if you are on inactive status.
CostThe cost to become inactive or remain on inactive status is the same as the cost to be on active status. You must still:
CPE requirements while on inactive statusThe CPE requirements while on inactive status are the same as active status. You must still complete 72 hours of CPE every 3 years, and a minimum of 16 hours each year. Included in these totals, you must complete at least 2 hours of ethics each year.
Eligibility to maintain NAEA membershipAn Enrolled Agent on Inactive Retirement status can continue a NAEA membership. Members on Inactive Retirement status qualify for Emeritus status and do not need to meet the NAEA CPE requirements.
Should you consider inactive status?Generally speaking, there is no advantage to selecting inactive status if you ever plan to return to practicing as an Enrolled Agent. If you are in fact permanently retiring from practice, then it may be appropriate, although you do have to continue to renew your inactive status and pay the renewal fee every 3 years.
For more information, consult IRS Publication 947: Practice Before the IRS and Power of Attorney
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