The Differences Between CPAs and EAs

CPAs are state-licensed accountants who can focus on a broad range of financial areas. EAs are federal-licensed professionals who focus on tax preparation and resolution.

Certified Public Accountants and Enrolled Agents

Most Henderson accountants are Certified Public Accountants or CPAs. However, some are Enrolled Agents or EAs. Understanding the distinction between these types of professionals can help ensure you choose the best accountant for your needs.

Certified Public Accountants

A CPA is an accountant that’s completed an exam and been certified and licensed by a state. CPAs can work in multiple states because states often accept licenses from other states or make the application process easier than the initial exam. Specializations range greatly between CPAs. One CPA may focus on personal finances and provide services related to income tax preparation and estate planning. Another may focus on business finances and offer services related to venture capital, mergers and acquisitions, management consulting and so forth.

Enrolled Agents

EAs are professionals who’ve been certified and licensed as tax practitioners and to represent clients before the Internal Revenue Service. An EA may or may not technically be an accountant but have earned this honor by working for the IRS. Being hired by the IRS and rising through the ranks to achieve its highest honor requires professional aptitude. Once EA status is earned, a professional must maintain it through a renewal process that has various standards requirements.

Choosing a CPA or an EA

The main difference between an EA and a CPA is that an EA focuses almost exclusively on tax preparation and tax resolution. A CPA may not focus on tax preparation at all or even provide the service. This doesn’t necessarily mean that an EA is better than a CPA come tax time. Many CPAs who provide tax services are eligible to be EAs and some even maintain their status as an EA and CPA simultaneously. If you’re primary goal is preparation of taxes and dealing with the IRS, then you can compare CPAs and EAs. However, if you have other financial needs, then only a CPA can help you with that, but not all CPAs will have the specializations that you require.