What is the difference between an IRS Enrolled Agent (EA) and a Certified Public Accountant (CPA)
Both Certified Public Accountants (CPAs) and IRS Enrolled Agents (EAs) are tax specialists, but it's important to note their differences.
Certification and Licensing
Certified Public Accountant (CPA)
A CPA is a professional accountant who has met specific education requirements, passed the Uniform CPA Exam, and obtained a state license to practice accounting. CPAs may offer various accounting services beyond taxation, such as financial planning, auditing, and consulting.
Enrolled Agent (EA)
An Enrolled Agent is a tax professional who has earned the privilege of representing taxpayers before the Internal Revenue Service (IRS). EAs achieve this by passing a comprehensive IRS examination or having prior experience as an IRS employee. They specialize in tax matters and have the authority to represent taxpayers in all matters, including audits, collections, and appeals.
Geographic Restrictions
Certified Public Accountant (CPA)
A CPA obtains their license through their state and must obtain separate licenses for each state they wish to practice in. Therefore, when seeking a CPA, choosing one licensed in your state is best.
Enrolled Agent (EA)
EAs are designated by the Internal Revenue Service (IRS) and can practice in ANY state. You can work with an Enrolled Agent not residing in your state.
Focus and Scope of Practice
Certified Public Accountant (CPA)
CPAs have a broader focus and can offer various accounting services beyond tax-related matters. They are well-versed in financial accounting, managerial accounting, auditing, and taxation. CPAs often work in areas such as financial reporting, financial analysis, and strategic planning, in addition to tax preparation and planning.
Enrolled Agent (EA)
EAs primarily focus on tax matters. They specialize in tax preparation, tax planning, and representation before the IRS. EAs are knowledgeable about the U.S. tax code and regulations and help individuals and businesses navigate the complexities of tax laws. They can represent clients during IRS audits and in other tax-related matters.
IRS Representation
Certified Public Accountant (CPA)
CPAs have the authority to represent clients before the IRS in various matters, including audits, collections, and appeals. However, CPAs may not have as extensive knowledge of tax-specific laws and regulations as EAs, as their expertise extends beyond taxation.
Enrolled Agent (EA)
The IRS specifically authorizes EAs and can represent taxpayers in all matters related to taxes. They have in-depth knowledge of tax laws, regulations, and IRS procedures. EAs can provide comprehensive tax services and represent clients at all stages of an IRS case, from initial contact to resolution.
Continuing Education Requirements
Certified Public Accountant (CPA)
CPAs must meet continuing education requirements to maintain their license and stay updated on accounting and tax-related developments. The specific requirements vary by state but typically involve completing a certain number of hours of continuing education courses within a specified period.
Enrolled Agent (EA)
EAs are also required to complete continuing education hours to maintain their status. They must complete at least 72 hours of continuing education every three years, including at least 16 hours of tax law updates.
In summary, while both CPAs and EAs are professionals who specialize in tax matters, CPAs can have a broader scope of practice that includes various accounting services beyond taxes. EAs, on the other hand, focus specifically on tax matters and have the authority to represent clients in all tax-related dealings with the IRS.