TABLE OF CONTENTS

1. Introduction
2. The Certified Public Accountant
   The Function of the CPA
3. The Enrolled Agent
   The Function of the EA
4. Difference Between a Certified Public Accountant and an Enrolled Agent
   Scope of Expertise
   Education
   Regulation and Licensing
5. Conclusion
6. FAQs

INTRODUCTION

When it comes to your business, you need some financial help. However, you’re not sure if you should turn to a Certified Public Accountant or an Enrolled Agent. CPAs and EAs, just what are they? Let’s check out the roles, responsibilities, and capabilities of these professions.

THE CERTIFIED PUBLIC ACCOUNTANT

A certified public accountant, or CPA is a reputable professional and considered an expert in accounting, finance management, and compliance. Moreover, a CPA is also a tax professional who has met education and training requirements, the licensing requirements that enable them to practice across public and private organizations. A CPA’s toolbox includes everything from financial statements, financial planning, tax preparation, forensic accounting, income tax, internal auditing, and so on. The primary function of a CPA is to help businesses thrive.

The Function of the CPA

• Although a CPA is an accountant, not all accountants are CPAs. Anyone who does any kind of accounting work, even those without a degree, can be called an accountant. However, a CPA is someone who has earned a professional designation, or a license, through a combination of education, experience, and licensing.
• Certified public accountants prepare, organize, and analyze financial records that businesses must turn in to the government. This includes tax returns filing, and submitting records to investors and to the SEC of the United States. Public accountants can work for organizations, individuals, government agencies, and non-profit organizations.
• There are CPAs specializing in areas that include taxation, auditing, forensic accounting, consulting, and of course financial reporting. Some are self-employed and usually work full-time. Often, they work overtime during the busy times of the year, such as tax season. Their job specifications change depending on the organization they are working for and its goals and objectives.

THE ENROLLED AGENT

An enrolled agent is a tax specialist or expert authorized by the Department of Treasure of the United States to represent taxpayers before the Internal Revenue Service. They’re the go-to experts on tax laws to help clients navigate their tax cases to the IRS. The EA license is the highest designation awarded by the IRS. It’s a credential that could help them in serving their clients better.

The Function of the EA

• An EA represents taxpayers before the Internal Revenue Service. They furthermore, have special licenses to prepare a client’s tax return and represent them in collections, appeals, and audits. An enrolled agent working on tax matters with you lets you focus on the other business aspects.
• EAs provide extensive tax expertise since the designation is considered the highest credential that a tax professional can receive. This, together with the continued education requirements, means that they have to stay updated and knowledgeable in tax-related matters.
• An enrolled agent, instead of an accounting departments is a great help to small businesses. For a small business or sole proprietorship, an EA could help perform specific duties that normally would be delegated to the accounting staff. For instance, EAs, help prepare and file taxes or tax returns.
• Although enrolled agents could not perform audits, they are, otherwise highly qualified to handle anything tax-related. Their services are in demand among self-employed individuals and small business owners.

DIFFERENCE BETWEEN A CERTIFIED PUBLIC ACCOUNTANT AND AN ENROLLED AGENT

Certified public accountants have a wider knowledge base in all aspects of accounting. Enrolled agents, on the other hand, focus solely on tax. CPAs have unlimited representation rights to help clients with tax-related concerns, as well as risk assessment, audits, financial planning, and business valuation. Nonetheless, CPAs are only allowed to practice in the state of their current license. EAs have limitless practice rights for any tax issues across all IRS jurisdictions. As far as tax is concerned, EAs can perform all the things that CPAs can do.

Scope of Expertise

• Enrolled agents primarily specialize in tax matters and are well-versed in tax codes and IRS regulations.
• Certified public accountants have a bigger expertise scope, such as accounting, tax preparation, financial planning, and auditing.

Education

• EAs need not have a specific college degree. Rather, they must pass the comprehensive exam administered by the IRS or have pertinent work experience at the institution.
• CPAs should have at least a master’s degree in accounting or any related course from an accredited university or college. Aside from completing the educational requirements, they should also accomplish a specific number of business and accounting credits to sit for the exam.

Regulation and Licensing

• Enrolled agents are directly licensed by the IRS and regulated by the Department of the Treasury
• Certified public accountants are licensed by the state board of accountancy and are regulated by professional standards and state laws.

CONCLUSION

While it’s important to understand the differences between an EA and a CPA, understanding your requirements is also vital. Be clear on the nature of your requirements to be able to hire the best professional that works best for you. Whether you choose a CPA or an EA, the key is to look for someone with experience on your specific tax concern, regardless if they’re a CPA or an EA.

FAQs

Q. What does a CPA do that an EA can’t?

Ans. EAs are not licensed to provide services outside the tax landscape. A CPA can provide financial planning, auditing, and other services aside from helping with tax issues.

Q. What sort of jobs can I get as an Enrolled Agent?

Ans. You can get various kinds of jobs in different industry verticals. These include tax advisory organizations, corporate tax departments, accounting firms, and independent tax consultants.

Q. How to apply for the CPA Exam?

Ans. First, you have to decide on the jurisdiction to which you apply. Afterward, you can acquire application materials and submit your accomplished applications as instructed.

Q. In general, what kind of tax concerns could have a negative impact on my application for enrollment as an enrolled agent?

Ans. Any overdue tax return not filed or any unpaid taxes do not qualify you to become an EA unless there is an acceptable payment arrangement made.

Q. Is it worth going for both an EA and CPA credentials?

Ans. If you have a CPA credential, you don’t need an EA designation. Primarily, an EA is for non-CPA tax pros. A CPA encompasses much more than an enrolled agent. Nevertheless, in some instances, you can go for an EA and then get a CPA later.

Q. Should I choose a CPA or an EA for my tax return filing?

Ans. This depends on your specific needs. One of the advantages of working with an EA is that they’re licensed to practice in every US state. In general, a CPA is a better choice if you need financial advice outside the scope of your taxes.

Q. How are CPAs and EAs similar?

Ans. Certified public accountants and enrolled agents both have extensive knowledge of the tax does of the United States. Furthermore, they can use their knowledge to represent clients in appeals, audits, and other IRS matters. Moreover, with either an EA certification or a CPA license, they should adhere to stringent ethical requirements and guidelines, as well as accomplish the set amounts of continued professional education to maintain the credential.