Tax Professionals: What’s the Difference Between EA and CPA


Taxes are an integral part of modern life, and it’s important to understand the difference between the two most common tax professionals: Enrolled Agents (EA) and Certified Public Accountants (CPA). Both are authorized by the IRS to represent taxpayers in the preparation of tax returns and other matters, but the two certifications have different qualifications and abilities. Understanding the difference between the two can help you decide which type of tax professional is best for your individual needs.

What Is an EA?

An Enrolled Agent is a tax professional certified by the IRS. EAs are authorized to represent taxpayers in any matter before the IRS, including audits, collections, and appeals. They must pass a three-part exam, demonstrate annual continuing education and adhere to a strict code of ethics. EAs are specialists in the field of taxation and are generally well-versed in individual, corporate, and partnership tax returns.

Unlike a CPA, an EA is not required to have a college degree in accounting or finance. However, they must be able to prove their proficiency in taxation through their exam results and continuing education. Furthermore, an EA is able to represent taxpayers in any state or territory of the US, whereas a CPA is only able to represent clients in their home state.

What Is a CPA?

A CPA, or Certified Public Accountant, is a professional designation for tax professionals who have met the educational, experience, and ethical requirements set by their state’s Board of Accountancy. CPAs are experts in tax preparation and planning, auditing, and financial reporting. They use their expertise to represent individuals and businesses in interactions with the IRS and other tax authorities. They can also provide advice on financial planning, business strategies, and investments.

To become a CPA, a person must pass the Uniform CPA Examination and meet the educational, experience, and ethical requirements of their state’s Board of Accountancy. CPAs are held to a higher standard than Enrolled Agents and must complete at least 40 hours of continuing professional education each year. Ultimately, CPAs can provide more comprehensive and complex services than Enrolled Agents and often command higher fees for their services.

What to Consider When Deciding Which One to Hire

When deciding between hiring an Enrolled Agent or a Certified Public Accountant, there are a few key factors to consider. First, you should consider the individual’s experience and qualifications. While both EAs and CPAs can provide tax-related services, the qualifications of each vary. EAs are licensed by the IRS and must pass a comprehensive exam and demonstrate a minimum level of experience. CPAs are licensed by state boards and must meet certain education and experience requirements.

You should also consider the services offered by each type of professional. While both EAs and CPAs can provide tax preparation and filing services, EAs are generally more limited in the range of services offered. CPAs may offer additional services such as financial planning and business consulting. Additionally, if you have a complex financial situation, a CPA may be better suited to provide the advice you need. Ultimately, the decision of which tax professional to hire should be based on your individual needs and preferences.

Final Thoughts

It is important to understand the differences between an EA and CPA when it comes to tax professionals. An EA is a federally-authorized tax practitioner who is able to represent taxpayers before the IRS and is knowledgeable in all areas of tax law. A CPA is an accountant who is licensed by a state board of accountancy and is typically versed in more than just tax law. Both types of tax professionals can provide valuable services and expertise to individuals and businesses in need of tax advice or preparation. Ultimately, the decision of which one to hire should be based on the individual’s or business’s needs and the expertise of the tax professional.

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