tax preparer vs enrolled agent

Enrolled agents are required to pass a comprehensive exam that covers all aspects of federal tax law. They also must complete ongoing training to ensure they stay up-to-date on changes to tax laws and regulations. They’re required to complete a total of 72 hours of continuing education courses every three years. An enrolled agent is a tax preparer vs cpa tax professional who is licensed by the Internal Revenue Service (IRS) to represent taxpayers before the IRS. EAs are authorized to prepare and file tax returns, as well as negotiate with the IRS on behalf of their clients. Our enrolled agents are tax professionals who have demonstrated technical competence in the field of taxation.

Become An Enrolled Agent, EA

tax preparer vs enrolled agent

By adhering to these requirements and ethical standards, Enrolled Agents can effectively maintain their credentials and continue to provide high-quality service to taxpayers. An alternative path to becoming an enrolled agent is through Internal Revenue Service (IRS) experience. Although CPAs may have a greater earning potential, that salary comes with the need to spend longer in school, gain more work experience, and take a much more in-depth exam.

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However, each year, some taxpayers are hurt financially because they choose the wrong tax return preparer. Be sure to check our tips for choosing a tax preparer and how to avoid unethical “ghost” return preparers. An enrolled agent is required to participate in continuing education courses to keep updated on changes in tax law.

Maintain Your Enrolled Agent Status

tax preparer vs enrolled agent

Enrolled agents must participate in at least 72 hours of credit for continuing education, which includes six hours of professional conduct or ethics. Enrolled Agents (EAs) are tax professionals who have earned the highest credential awarded by the Internal Revenue Service (IRS). To maintain this prestigious status, EAs must adhere to continuing education requirements and uphold ethical standards outlined in the Treasury Department Circular 230.

Enrolled Agents vs. Other Tax Professionals

A CPA typically must complete college or university studies in accounting, meet the experience requirements and complete an exam known as the Uniform CPA Exam. If you’re a commercial tax return preparer, you must complete free online continuing education courses. IRS continuing education courses for tax preparers do not count toward your required New York State hours of coursework. NAEA members are held to a higher standard than the IRS’ minimum 72 hour continuing education requirement.

tax preparer vs enrolled agent

We encourage professionals, even if they are not licensed, to participate in the IRS’ annual filing season program. This is to demonstrate their commitment to learning and to have limited representation rights with the IRS. Certified public accountants (CPAs) are licensed accountants who have completed specific education requirements and passed the CPA exam. CPAs offer a range of financial services, including accounting, auditing, and tax preparation.

Fortunately, with the right tax agent on your side, taxes don’t need to be stressful. An enrolled tax agent can help you with proper tax planning so you can potentially receive a larger refund or reduce your tax burden. Not signing a return is a red flag that the paid preparer may be looking to make a quick profit by promising a big refund or charging fees based on the size of the refund. EAs must complete 72 hours of continuing education courses every three years. Those who are also members of the National Association of Enrolled Agents (NAEA) must complete 30 hours per year for three years for a total of 90 hours. A tax professional can also qualify as an EA if they’ve worked for the IRS for at least five years in a position that requires extensive knowledge of the tax code and its applications.

To a large degree, the job of enrollment agents is actually recession proof. If the idea of protecting the rights of others appeals to you, this could be a great career option. To become an enrolled agent, it is necessary to pass a three-part examination.

tax preparer vs enrolled agent

Costs and Processes of Becoming an EA and CPA

Many applicants are delayed or not allowed to practice law due to background issues found during the moral character review. To become a CPA, they must first earn a degree in finance, accounting, administration, or management. Because CPAs can only practice in the state where they are licensed, they should also pick the state where they want to take the exam. For tax resolution and IRS representation, they can represent anyone for any federal or state issue besides Oregon (unless they are specifically licensed in Oregon). If you do want help preparing your return, then you should choose a tax preparer whose credentials and expertise best meet your needs.

How can I check a tax preparer’s credentials?

Where they vary is in the time nad effort needed to cross their respective finish lines. CPAs have a well-earned reputation for being experts in accounting, compliance and finance management. But they’re not the only ones who can help people make sense of tax issues and concerns. If you’re considering a career focused on assisting clients with tax-related issues, you may be weighing your options between enrolled agent vs CPA. If you pursue the enrolled agent designation via the EA exam, you don’t have to meet an experience requirement. You’ll receive your exam results immediately, and once you’ve passed, you can apply for enrollment.

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