Updated: Oct 23, 2020
It can be said that Enrolled Agent and CPA can both assist you in a number of tax issues such as tax reporting, tax preparation. They are both the professionals necessary to help your business grow, however, these are two different terms because they are issued by two different certifications and they have their own responsibilities. So what is the difference and similarity of Enrolled Agent and CPA? In this article, we will give you some information to help you better understand these two terms.
What is CPA?
A certified public accountant (CPA) is a certification given by the American Institute of Certified Public Accountants (AICPA) to individuals that pass the Uniform CPA Examination and meet the education and experience requirements
A CPA can operate independently or join a professional company (auditing company, accounting service company...), providing accounting services to individuals units for charging.
What is Enrolled Agent?
Enrolled Agent or EA for short, they are certified tax professionals. They have experience in all tax matters, for both individuals and businesses from small to large. As an EA, they will have full authority to represent clients before the IRS, covering all tax topics and working with any administrative level, in all matters except for Tax Court, where an attorney must represent their clients.
We also have a specific article for an Enrolled Agent, click the link for more information: What is an Enrolled Agent?
For details, you can read more about CPA or an Enrolled Agent through these blogs:
What is an Enrolled Agent
Enrolled Agent vs. CPA:
1. The similarities
Both enrolled agents and certified public accountants enjoy unlimited practice rights before the IRS. For tax matters, they can all handle and provide services for clients. Also, they are all holders of advanced certifications and always receive regular education and before that, they also have to meet a lot of requirements in terms of ethics and experience.
Both EAs and CPAs are granted unlimited representation rights to represent taxpayers before the IRS. This means they can represent taxpayers for any tax matters such as payments, collection, even appeals.
2. What are the differences?
Although both CPAs and EAs are tax experts, the starting points for both and the goals of the two certifications are different.
CPAs are experts in accounting and have many years of experience in the accounting and auditing fields. They also passed an exam related to their accounting skills to obtain a related certification, a certification given by the American Institute of Certified Public Accountants (AICPA) to individuals that pass the Uniform CPA Examination and meet the requirements of their state’s board of accountancy.
With EAs, they spend years working on tax and tax matters, as well as tax processes. They must take the SEE exam to complete their certification and that test focuses exclusively on tax preparation and very little on accounting practices.
An enrolled agent is a federally-authorized tax practitioner rather than a state-licensed professional. An EA can also provide services such as tax advice, tax preparation, and tax preparation not only in the state and even the federal government.
Meanwhile, a CPA will go with financial issues within your company such as asset allocation, from financial planning to cost research, to the design and implementation of electronic data processing systems for businesses. A CPA is not only qualified to prepare your taxes but also advises on other financial matters. They will usually work with you to assist you with your company's financial affairs, but they are still eligible to sign your tax return.
If you’re looking for a little accounting guidance, or need help with your bookkeeping, budgeting, or financial planning, you’re better off working with a CPA.
But if you have any issues regarding taxation, finding an enrolled agent.
If you, as a business owner, see that you cannot handle accounting on your own, consider hiring an accountancy service for contractors to help you with it.
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