What is an EA?

What is an Enrolled Agent?  An Enrolled Agent (EA) is a tax practitioner authorized by the United States federal government to represent tax payers in affairs with the Internal Revenue Service (IRS). The United States Department of Treasury empowers EAs to represent taxpayers for any audits, appeals or collections. This occupation is and has been regulated by Congress since 1884. It was originally established to investigate questionable and fraudulent claims that were submitted in the wake of the Civil War. Congress decided to regulate persons who were given the task of representing citizens in affairs with the United States Treasury.

How Do You Become An Enrolled Agent?  In order to become an enrolled agent, you must pass the Special Enrollment Examination or be able to provide enough documentation to show that your experience qualifies you for this position. The applicant will have to pass an extensive background examination that includes investigation of the applicant’s tax history. The examination is comprehensive and covers all facets of the tax code.

What Does the Enrolled Agent Do?  Enrolled agents are given the authority to prepare tax returns, advise and represent individuals, estates, corporations, partnerships and trusts. EAs are experts who keep up with the ever changing area of taxation. EAs are therefore effectively able to represent persons who are audited by the IRS. EAs are required to show they are competent in tax laws before they can represent a tax payer before the IRS. EAs receive their license from the federal government while Certified Public Accountants and attorneys are usually licensed by the state in which they reside

Difference Between CPA and EA

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Is there any difference between a Certified Public Accountant (CPA) and an Enrolled Agent(EA)? Yes, the two are different in many aspects, but some people find it hard to distinguish between a CPA and an EA.

A CPA has a wider role when compared to an EA. A Certified Public Accountant should have a vast knowledge of accounting, auditing, business law, personal finance and taxes. On the contrary, an Enrolled Agent has to be knowledgeable about taxes, as this is the specialty area of an EA.

Another difference that can be seen between a CPA and an EA, is that the former has the right to prepare and sign financial statements, whereas an EA does not enjoy this right. Unlike an EA, a Certified Public Accountant can do financial statement audits.

In regards to the jurisdiction, a CPA falls under the state jurisdiction. A CPA may act only for tax payers in the states specified by the jurisdiction. On the other hand, an EA can practise in any state.

Well, another difference that can be seen between a Certified Public Accountant and an Enrolled Agent, is their education and exams. An individual should posses a degree to complete a CPA examination. The CPA examination includes four papers: Auditing and Attestation, Business Environment and Concepts, Financial Accounting and Reporting, and Regulation.

An individual can become an EA in two ways. An individual can become an EA if he has worked for the IRS for five years, or if he has taken the Special Enrolment Examination, 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 and the Treasury Department guide.

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