Key Points
EAs and CPAs are both professionals capable of assisting with tax preparation, tax appeals, and dealing with federal and state tax agencies and both can work with individuals and businesses. However, unless a CPA is also an EA, they are restricted to assisting with appeals and federal or tax agencies outside of their licensing state.
The main difference between an EA and a CPA is their scope of work. EAs are primarily focused on tax-related issues while CPAs deal with a broader host of financial areas including assurance and attestation services (compilation, reviews, and audit work) that EAs cannot perform.
What is an Enrolled Agent (EA)?
Enrolled agents (EA) are federally authorized tax professionals empowered by the Internal Revenue Service (IRS) to have unlimited practice rights. This means they are unrestricted as to what tax matters they can handle, which taxpayers they represent, and they can represent clients in all 50 states.
What is a Certified Public Accountant (CPA)?
Certified public accountants (CPA) are licensed by state boards of accountancy to work in public accounting. This designation allows CPAs to perform duties that unlicensed accountants cannot, such as auditing and reviewing financial statements. If the CPA specializes in taxation, they can also sign and represent clients within their state.
Process of Becoming an EA vs a CPA
To become an EA requires passing a three (3) part Special Enrollment Exam (SEE) or five (5) years of work with the IRS. EA’s must also adhere to ethical standards, pass a background check, and are required to have full tax compliance.
Additionally, they are required to take continuing education to maintain their certification status.
To become a CPA requires a person to take 150 hours of college-level public accounting courses, passing a four (4) part CPA exam, accumulating the required hours of experience according to their state, and applying for licensure.
Additionally, they are required to take continuing education to maintain their license.
Do you Need a CPA or an EA?
EAs and CPAs are both professionals capable of assisting with tax preparation, tax appeals, and dealing with federal and state tax agencies and both can work with individuals and businesses. However, unless a CPA is also an EA, they are restricted to assisting with appeals and federal or tax agencies outside of their licensing state.
The main difference between an EA and a CPA is their scope of work. EAs are primarily focused on tax-related issues while CPAs deal with a broader host of financial areas including assurance and attestation services (compilation, reviews, and audit work) that EAs cannot perform.
Deciding which professional to hire should not be solely based on credentials. Look for someone who will advocate for you, help explain tax matters, and leverage what they know to help you minimize your tax consequences.
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