EA vs. CPA: What’s the Difference Between These Certifications?

When it comes to pursuing a career in accounting or tax-related fields, two certifications often come up: Enrolled Agent (EA) and Certified Public Accountant (CPA). While both credentials signify a high level of expertise and can open doors to various opportunities, they differ in their scope, requirements and areas of specialization. In this article, we’ll explore the key distinctions between the EA and CPA certifications, whether you are looking to work with one, or become one. 

A financial advisor can help you maximize the tax efficiency of your investments.

What Is an Enrolled Agent (EA)?

An enrolled agent, or EA, is a tax professional who focuses on managing tax arrangements for business or private entities. EAs boast a wide range of knowledge in tax-related subjects, such as income, estate, gift, payroll, levies, returns, inheritance, non-profit and retirement taxes.

Once EAs have passed their qualifying exam, the federal government recognizes them as tax specialists. An EA is the highest credential the IRS awards.Typical EA responsibilities include representing business or individual clients in tax audits, tax appeals and tax collections. EAs can also provide tax advice, tax return filing and more.

What Is a Certified Public Accountant (CPA)?

Certified public accountants, or CPAs, have a more flexible and expansive repertoire than EAs. They deal in all sorts of realms within the tax world, making them a great choice if you’re looking for a broad scope of expertise. Whereas the federal government approves EAs, states approve CPAs.

CPAs typically do most of their work for public accounting firms of all sizes. They could be specifically licensed as auditors, financial planners, corporate and executive accountants and tax consultants. So, CPAs could assist in all accounting, tax and financial services for the businesses, individuals and other organizations they may represent.

CPAs help clients set and achieve financial goals through money management and financial planning. These goals could include anything from making a down payment on a home to opening a new branch of a business. 

Costs and Processes of Becoming an EA and CPA

To become an EA, it’s necessary to pass an IRS-administered exam. There are three sections to the exam:  individuals, businesses and representation, practices and procedures. The cost of each section of the exam is $267. There is also a continuing education component, with a minimum of 72 hours every three years required.

To become a CPA, a person must take 150 hours of public accounting courses, typically at a college or university. Though requirements vary by state, it is common for those aiming to become CPAs to take a review course before sitting for the four-part exam. These courses can cost anywhere from $1,200 to $3,500.

Application fees for the CPA exam vary by state but are typically around $100. Each of the exam’s four sections costs about $200, with the exact cost depending on the state. There is also a continuing education component, but the exact number of credit hours varies by state.

What’s the Difference Between EAs and CPAs?

Now that you know what CPAs and EAs do in practice, here’s a side-by-side comparison of their main focuses, broader skill sets and hourly rates:

EA vs. CPA: Which Is Best for You?

When deciding between an EA or a CPA, you will see that both types of professionals are well-qualified. They can both deliver the financial guidance you may need for your taxes. However, which one you should consult depends on the specific issue you want to resolve. In general, CPAs can provide a much wider scope of tax services than an EA can.

EAs can help you work through an IRS audit or a collection problem, and they can also perform bookkeeping services that could be useful for businesses when preparing tax returns. Their expertise can be particularly beneficial for individuals and businesses seeking specialized tax advice.

CPAs, however, are more adept at meeting financial planning and accounting needs. When it comes to tax planning, they can also help in identifying tax credits and deductions to lower your tax liability. They tend to occupy a wider range of roles, including in auditing, management consulting and financial analysis.

Ultimately, if you have accounting needs with a micro focus, working with an EA could make more sense. On the other hand, if you are interested in receiving broader financial services alongside  tax assistance, then a CPA may be the way to go.

Representation Rights and Scope of Authority

Both enrolled agents and certified public accountants can represent clients before the IRS, but their authority is defined differently. Enrolled agents receive their credential directly from the federal government, which gives them unlimited rights to represent taxpayers in audits, collections and appeals, regardless of the taxpayer’s location. This authority is tied specifically to federal tax matters.

Certified public accountants also have representation rights before the IRS, but their licensure is granted at the state level. While CPAs commonly represent clients in federal tax matters, their broader authority depends on maintaining an active state license and meeting state-specific requirements. CPAs may also represent clients in state tax matters, which can matter when dealing with multi-state filings or audits.

This distinction can affect whether a CPA or an EA is appropriate. IRS-focused disputes, back taxes and federal compliance issues often fall squarely within an EA’s core practice. Situations involving both tax issues and broader accounting, financial reporting or business operations may align more closely with a CPA’s scope of practice.

Whether you hire a professional or do your taxes yourself, get a quick estimate of your tax bill before filing by entering your details into our income tax calculator.

Bottom Line

When deciding whether to work with an EA or a CPA, you can rest assured that both types of professionals can offer a high level of tax-related expertise. Where they differ is in where their expertise lies and in which services they tend to offer. EAs are tax specialists licensed by the federal government. In contrast, CPAs are certified by the states, and they tend to offer broader tax and financial services. There are also divergences in their representation rights before the IRS due to differences in licensing. 

Tips for Managing Your Taxes

• You may want to consider working with a professional financial advisor before speaking with a CPA or EA. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
• SmartAsset’s tax return calculator can tell you how your income, withholdings, credits and deductions impact the amount due on your returns and any credit you may be entitled to.

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