Understand the differences between Enrolled Agents and CPAs in order to make the best tax decision.
- Both an Enrolled Agent (EA) and a CPA are professionals with official licenses and the necessary training to prepare U.S. tax returns with rigor and professionalism.
- Both have a thorough knowledge of the U.S. tax code, recognized after passing rigorous examinations, and can represent third parties before the IRS in appeals, tax investigations and other administrative matters.
- Enrolled Agent credentials are granted by the Treasury Department and have a national scope. Therefore, an EA can practice in all IRS jurisdictions. In comparison, a CPA is a Certified Public Accountant who is licensed by a particular state.
- A CPA's training includes accounting and other financial areas, such as auditing financial statements, preparing reports for the financial markets regulator (SEC) and business valuations, for example. An EA's training is focused on personal and business taxation, IRS procedures and, like CPAs and tax attorneys, an EA is subject to the professional and ethical regulations of IRS Circular 230 (collectively called "Circular 230 Professionals").
- In short, in the area of taxation, EAs and CPAs have the same training and the same privileges and obligations before the federal tax authorities. The big difference lies in a CPA's ability to practice as a Certified Public Accountant, certify financial statements and provide financial advisory services outside the tax arena.
How to choose the tax professional that best suits your needs?
Because the tax training, privileges and obligations of an EA and a CPA are identical in practice, the decision will depend on your personal situation and the nature of your needs. If you need accounting services or financial planning beyond taxes, a CPA may be the wiser choice, but if you only need tax advisory services, choosing an EA may be more appropriate and more economical because of the strict focus on tax services.
What is an Enrolled Agent (EA) and how can an EA help you?
An Enrolled Agent is a professional authorized by the IRS (Internal Revenue Service) to act as a taxpayer representative in all administrative tax matters. This includes the preparation of tax returns, representation in audits, tax appeals at the administrative level, and resolution of tax problems.
The main advantages of working with an Enrolled Agent include:
- Representation before the IRS: EAs can speak on your behalf and negotiate with the IRS.
- Specialization in taxation: They have in-depth knowledge of tax laws.
- Audit and tax litigation experience: They can help you resolve complex tax disputes.
Why choose an Enrolled Agent?
At Expat1040 we can offer you direct and specialized tax representation before the IRS. Some reasons why you might choose to work with an Enrolled Agent are:
- Complex tax problem resolution: If you face an audit or tax dispute with the IRS, an EA is a skilled professional to help you obtain a resolution.
- Tax specialization: While CPAs have a broader focus, EAs have a dedicated tax focus.
- Direct access to the IRS: EAs can efficiently manage your representation before the IRS.
- Federal Certification: Unlike CPAs who are licensed by a particular state, Enrolled Agents have a national license, which allows them to directly operate anywhere in the country and in any IRS jurisdiction, without relying on the CPA "mobility" mechanism, which could be subject to changes in the laws of each state.
The expert tax representation you need with an Enrolled Agent.
