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Enrolled Agent Vs. CPAs

Updated on July 8, 2012

Deciding between an Enrolled Agent and a Certified Public Accountant

Enrolled Agent Compared to. CPA: Which Is Right for You?

When you're confronted by a tax problem, it's wise for you to select someone qualified for your own tax representation. Even though both enrolled agents and certified public accountants (CPA's) provide highly specialized abilities to the table, they both have their areas of strength. The style of representation suited for you would be determined by what, in particular, your requirements are.

Although they have many differences, enrolled agents and CPA's also have a few things in common. They both have an extensive background in tax accounting, obviously a tax accountant will have a greater degree of experience in this area, this is important to understand if the large part of your tax issues deal with accounting errors or improper accounting practices. Enrolled agents will have a sufficient degree of experience in tax accounting to help most individuals and small companies whose tax problems are of a nature other than accounting errors.

Enrolled Agent

An enrolled agent is licensed by the United States Treasury Department to represent you to the Internal Revenue Service (IRS) on a variety of tax-related issues. This occupation has been available since 1884 and was originally intended to explore fraudulent and questionable claims that were filed after the Civil War. At that time, Congress began regulating these individuals.

Enrolled agents offer the following services:

• Preparation of Tax Returns

• Offer tax advice relating to properties, businesses as well as trusts as well as to individual persons along with their families

• IRS notices and audits

• Negotiating with the IRS regarding tax relief planning

• Collections action from a field collections agent, or Revenue Officer

• Filing an Offer in Compromise

• General audit investigation that covers multiple years

• Obtaining relief from liens, avoiding wage garnishment and levies.

• Guiding you through the Administrative Appeals Process

• Helping you reduce penalties

• Issues with Payroll taxes

When it comes to accounting and bookkeeping tasks, CPAs are much better trained, knowledgeable and suited. However, unlike CPA's, they also do not engage in other accounting tasks such as bookkeeping.

Certified Public Accountant (CPA)

CPA's often handle tax issues for small enterprises and self-employed individuals since their Education enables them to evaluate financial statements as well as offer sound business advice. Enrolled agents are federally regulated, CPAs are licensed by the State, and may specialize in tax accounting. This expertise allows them to handle tax accounting issues such as validating income items and deductions, and filing missing returns for their clients.

CPA's also charge more, but this is easily justified by the wide range of skills they provide.

In a nutshell, enrolled agents are experts on income taxes for everyone ranging from individuals to large corporations while CPA's are experts on everything else related to taxes including auditing, accounting, valuation and personal finance, among other things.


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