CPA vs Enrolled Agent: What is the difference?
Certified Public Accountants (CPAs) and Enrolled Agents are both qualified to perform accounting tasks for your business. When business owners are shopping or looking around for a good accountant for their business, they may come across both of these professionals. Since the next post will explain how to find a good accountant, it may be helpful to understand what the difference is between a CPA and an Enrolled Agent (EA):
Certified Public Accountants (CPA):
Certified Public Accountants generally have a 4-year undergraduate degree with a major in accounting. Some have masters degrees. They receive the CPA title by passing the Uniform CPA Exam and then they receive licensing from the state board in which they live. Continuing education requirements are different in every state. They may include 20-40 hours of continuing education. Duties include but are not limited to Corporate Finance, Financial Accounting, Financial Analysis, Auditing, Tax Preparation, and Tax Planning. Some accountants practice general accounting, while others only specialize in a few services. They may be self-employed with their own business, in which case they provide services direct to the consumer, or they can be employed by an accounting firm.
Since the certifying boards are different in every state, you may also see other accounting titles depending on where you live, such as Licensed Public Accountant (LPA), Registered Public Accountant (RPA), and others.
Enrolled Agents (EA):
Enrolled Agents are licensed by the IRS, which means that they have a federal, nation-wide license. This is the highest license granted by the IRS. In order to obtain this license the candidate must pass all three parts of the Special Enrollment Examination or must have worked at the IRS for five consecutive years in a position of applying and interpreting provisions of the internal revenue code. They must complete 72 hours of continuing education every three years. They can do most any accounting tasks, yet their specialty is the tax code. Enrolled Agents may also be self-employed or work for large firms.
Another professional that is also qualified to represent taxpayers before the IRS (beyond CPAs and EAs) is an IRS Tax Attorney.
Again, the purpose of providing this information is to assist you with the next post: How to Find a Good Accountant. Knowing the difference between a CPA vs Enrolled agent can help you in your search.
Accountants and Auditors – Bureau of Labor Statistics
What is an Enrolled Agent – National Association of Enrolled Agents
Understanding Tax Return Preparer Credentials – IRS
Certified Public Accountant on Wikipedia
Enrolled Agent on Wikipedia
This article was not written by an accountant. Consult with a CPA or other accounting professional before performing accounting for your business.
If you have a question (or answer to a question) about this article, leave a comment below.