Many wonder what the differences are between a CPA (Certified Public Accountant) and an EA (Enrolled Agent). In short, CPAs have to know a great deal about auditing, accounting, tax, business law, valuation, personal finance, planning of various kinds, and myriad other things. EAs must know pretty much everything on income taxes for individuals, businesses, and non-profits. When you compare the two designations, CPA or EA, you come to realize that for EAs, tax issues are their only specialty. Their mandatory continuing education is solely on taxation, which means that their focus is on that one topic and very little else, except for mandatory ethics. The bottom line is: a CPA does not always have the tax expertise of an EA and an EA does not always have the accounting expertise of a CPA. Part of the problem EA’s face as a tax professional is the public’s understanding of what these two designations mean and what expertise each one may possess. Most professionals would not recommend an EA to a client that needed accounting expertise but we can’t figure out why so many professionals recommend a CPA for tax purposes. The reason may simply be that the average taxpayer does not know what an EA is or does. Simply stated, the definition of an EA is: "one who is RECOGNIZED by the IRS as a tax expert." Enrolled Agents are the only FEDERALLY Authorized Tax Professionals. * Phillip B Chute is an Enrolled Agent, tested, licensed, and appointed by the IRS directly. He has prepared or supervised over 25,000 tax returns over 30 years.
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