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An enrolled agent is a person who has earned the privilege of representing taxpayers before the Internal Revenue Service by either passing a three-part comprehensive IRS test covering individual and business tax returns, or through experience as a former IRS employee. Enrolled agent status is the highest credential the IRS awards. Individuals who obtain this elite status must adhere to ethical standards and complete 72 hours of continuing education courses every three years.

Enrolled agents, like attorneys and certified public accountants (CPAs), have unlimited practice rights. This means they are unrestricted as to which taxpayers they can represent, what types of tax matters they can handle, and which IRS offices they can represent clients before.

It can get a little confusing with all the accounting acronyms out there. A similarity among various accounting jobs makes distinguishing accounting job titles even more difficult.

The following article explains the differences between two of the most commonly confused job titles; Enrolled Agent and CPA.

Enrolled Agent vs. CPA: What’s The Right Choice?

Majority of people turn to the two well-known groups of licensed tax professionals: certified public accountants (CPA) and enrolled agents (EA). No matter the acronym after their name, the first step in your decision-making process is to make sure they are licensed.

To understand the difference between an enrolled agent and a CPA, we must look at what each of them actually does.

Enrolled Agent

EAs are considered tax specialists. They have a vast knowledge of anything that pertains to income tax, inheritance tax, gift tax, estate, payroll, retirement, and non-profit taxation.

In order to become an enrolled agent, you must take the EA exam or have at least 5 years of IRS work experience under your belt. The EA exam, also known as the Special Enrollment Examination (SEE), is a 3-part exam. Each section tests your knowledge on all tax-related matters.

Part one of the exam focuses on Individuals and covers 5 sections: Preliminary Work and Taxpayer Data, Income and Assets, Deduction and Credits, Taxation and Advice, and Specialized Returns for Individuals.

Part two is considered the hardest section and is based on Business Entities. Candidates should study very hard to pass the three sections that make up this part: Businesses, Business Financial Information, and Specialized Returns and Tax Payers.

The third part of the exam covers Representation, Practice and Procedures. This part of the EA exam is broken down into 4 sections: Practices and Procedures, Representation before the IRS, Specific Types of Registration, and Completion of the Filing Process.

Once you have passed the EA exam, you are federally recognized as a tax specialist.

Certified Public Accountant

CPAs have a broad range of knowledge on all topics related to accounting, including auditing, taxes, business law, finance and more.

To become a CPA you must first complete the education requirements of the state in which you plan to practice.

After you have met the prerequisite education requirements, you can sit for the CPA exam in that state. The CPA exam is a standardized test that consists of 4 different sections: Auditing and Attestation, Business Environment and Concepts, Financial Accounting and Reporting, and Regulation.

Depending on your state, you may also have to complete a work experience requirement. Typically this is 1 year of accounting-based work under the supervision of an active CPA.

CPAs are licensed at the state level and can only practice in that state. This is one of the biggest differences between CPA’s and enrolled agents, who are licensed on a federal level.

Obviously, cost is a primary concern and most people are looking for the best deal. Some people want to know “how much” before they will go any further with discussing their tax problem.

Some tax firms prey on these individuals by quoting an upfront fee of between $599 and $2,500. Of course this is not an indication of the total cost and is usually followed with ongoing fees that can total thousands of dollars.

Our approach is to assess your specific situation and quote according to the services necessary to resolve your case, allowing you to know your true costs upfront. In addition, we understand that our clients are experiencing a debt crisis so we expect to work with them to make resolving it affordable.

There are 4 primary methods, and you need to understand the difference, as many companies’ methods are not transparent and often very misleading.

Flat Fees – All-Inclusive: A flat fee that includes all required services to complete your case is the most reliable way to immediately know the full cost of your case before committing to work with any tax relief company. It also assures that you are working with a company that has professionals on staff that can handle all services associated with your case.

Flat fees - Non-Inclusive: many firms will quote a low fee, but downplay or outright neglect to tell you that they don’t provide some critical services. Ask if your "flat" fee covers all of the services required to resolve you tax issue. Bookkeeping, audit representation and filing your back tax returns are common services that some tax relief companies exclude. Failure to include these services can cause delays and unexpected costs to your case, not to mention the inconvenience of having to find additional professionals to get the work done.

Teaser Fees: Some tax relief firms take advantage of price shoppers by selling them on what appears to be a reasonable upfront “investigation fee,” but then follow up days or weeks into the process to inform them that the remainder of the case is going to be additional money.

Ongoing Fees: Other companies just bill you by the hour, which is by nature a conflict of interest leading to unpredictable, ever growing costs and slow progress of your case.

The time a tax relief company has been in business is important because it is a way to measure their credibility and experience. Tax resolution is a specialized professional service that requires understanding of a dedicated part of tax law and IRS procedures.

Companies that can demonstrate an extended track record of strong client service and results can truly be considered credible sources of tax resolution services.

We've been in the tax business since 1988, so we know from experience that 'the other guys' simply don't match up.

Unfortunately, no. The other comparison sites that do exist are fee based advertising sites. Although many of them have an objective component to rating the companies, the top rated companies have paid a fee to be listed as the “Editor’s Pick” or the “Gold Seal Winner.”

Other companies listed on these sites, but that have not paid a fee, are often rated down due to subjective assessment from the editor.

A reputable tax relief company will have done a good job of assessing your situation before you ever spend a penny. If they do, then the tax relief company should have no problem backing their services with a guarantee.

Our approach starts with a complete assessment of your case so that we are able to determine what can be done. If your situation requires professional assistance, then we will offer to take on your case. We guarantee our services and will not take on a case that we cannot resolve.

Our ability to accurately assess our client’s situation and pursue the resolution that is applicable to them is a primary reason for our success. Avoid companies that want to charge you before they investigate your situation or won’t provide you with a contract or guarantee that outlines the total fee or scope of services.