Do you need an accountant in the United States?
Difference Between CPA and EA - Accounting and Tax Professionals in the United States
Is there any difference between a Certified Public Accountant (CPA) and an Enrolled Agent (EA)?
Yes, the two are different in many ways, but some people have a hard time distinguishing between a CPA and an EA.
The CPA has a broader role when compared to an EA. The Certified Public Accountant (CPA) must have an extensive knowledge of accounting, auditing, business law, personal finance and taxes. In contrast, a Registered Agent (EA) has to be knowledgeable about taxes, as this is an EA's area of expertise.
Another difference between a CPA and an EA is that the former is accredited to prepare and sign financial statements, whereas an EA does not have this right. Unlike an EA, a Certified Public Accountant can also audit financial statements.
As far as jurisdiction is concerned, the CPA is under the jurisdiction of the State. The CPA can only act for taxpayers in the states specified by the jurisdiction where your license was issued. Most states have their own State Board of Accounting, which controls the issuance of CPA licenses. On the other hand, an EA can practice in any state, as this profession is regulated by the federal government and authorized by the Treasury Department.
Another difference between a CPA and an EA, is their education and knowledge exams they are exposed to. An individual must be a graduate to sit the CPA exam. The CPA exam is made up of four folders: Auditing and Certification, Business Environment and Concepts, Accounting and Financial Statements, and Federal and State Regulations.
An individual can become an EA in two ways, by having worked for the IRS for five years or more, or by taking the Special Enrollment Exam, which consists of three parts. The first part consists of questions on tax codes for individuals, the second part on tax codes for business entities, and the last part on Circular 230 (IRS - Tax Professional Rules of Practice) and the Department of Treasure.
If you need to maintain your accounting or an accounting audit, personal or your company, a CPA would be the best fit.
But if what you need is to prepare your tax return or resolve a dispute with the IRS about taxes owed, the EA may be your best option.
Remember, taxes are laws, accounting is numbers.
It does not matter what title the professional carries before his name, the most important thing is that he is licensed and accredited for the profession.