What's the difference between an Enrolled Agent (EA) and a Certified Public Accountant (CPA)?

Question

What's the difference between an Enrolled Agent (EA) and a Certified Public Accountant (CPA)?

Answer 1

A CPA has a college degree (usually in accounting) and can certify financial statements of public companies. They MAY have experience in taxation, but may not. To become an Enrolled Agent (EA) a person either has to pass a 2 day exam administered by the IRS or have worked for the IRS in a capacity that requires the interpretation of the Internal Revenue Code. Both also have to submit to an examination of all open tax returns (usually 3 years) and must have met all tax obligations for state, local and federal taxes.

CPA's and EA's both can represent tax payers before the IRS as can an attorney. To represent tax payers before the tax court, you must be an attorney or have passed a separate tax court exam.

CPA's EA's and attorneys are the only federally recognized tax professionals that can represent a tax payer before the IRS. EA's are the only federally recognized tax professional that gets its authority from the federal government. CPA's and attorneys are regulated at the state level.

CPA's EA's and attorneys must adhere to a set of rules of ethical conduct spelled out in the Internal Revenue Code known as Circular 230. Violation of these rules could result in fines or loss of credentials.

Because CPA's may or may not have a tax background, just looking for a CPA may not be a good idea when you need a representative for an IRS audit or to have your tax return prepared.

I am an EA. In the 17 years of preparing tax returns, I have had to correct several returns prepared by CPA's bacause they were prepared incorrectly.  

Answer 2

In layman's terms a CPA is an expert in accounting and has been licensed by the state he practices in.  An Enrolled Agent is an expert in taxes and has passed a 2 day long test given by the IRS.

CPA that are self employed often to tax work.  Either one can represent you before the IRS and so can an attorney

Answer 3

A CPA has completed College, has auditing experience and pass a state test to become certified.  An EA has passed a two day test before the IRS and is required to have 5 years of Auditing experience.  Both CPA and EA can represent you before the IRS and Tax Court.  This is also true for an Attorney.  An Unenrolled Agent can only help you during a audit if that person prepared your return.    

Answer 4

EAs are certified by the IRS to do tax related work.  CPA are licensed by individual states to do a wide range of accounting work.  That is a bit of a simplification but basically that is the difference.