CPA vs EA

Difference Between CPA and EA (Enrolled Agent)

Enrolled Agents (EA) and Certified Public Accountant (CPA) are licensed professionals who can handle the tax issues of an individual or a business. The primary difference between the two is that the license of an EA is authorized by the federal government, i.e., the Internal Revenue Service (IRS), giving them nationwide authority. The CPA license is issued by any of the 55 U.S. states, restricting a CPA’s authority to the state level.

CPA vs EA debates are a common occurrence in the life of an aspirant seeking a job in the sphere of accountancy.  The roles of EAs are centred around taxation but holding greater authority as they represent their clients before the IRS. CPAs’ range of services goes beyond taxation as they could be public accountants, tax accountants, personal finance managers, business consultants, auditors, controllers, or federal officers, etc.

What is a CPA?

Certified Public Accountant (CPA) is a professional who is licensed to carry the duties of –

  • Accountants
  • Financial Advisor
  • Tax specialists
  • Financial Planner
  • Individual and Business Consultants
  • Chief Financial Officer
  • Auditor
  • Controller

For example, you are taking the services of a CPA to manage your accounts and financial services. In this case, the CPA will help prepare your accounts, audit them, file tax returns, give financial advice to grow your wealth and save taxes. To become a CPA, you must clear the four parts of the CPA exam administered by AIPCA. You get 18 months to pass the sections in an exam cycle. Each state has a body that governs the CPAs. The states hold specific eligibility criteria to qualify for the exam in terms of age, experience, educational qualifications, etc. You can learn more about the CPA application process here.

For example, some states need 120 credit bachelor’s degree while others mostly require 150 credit college degree. Also, it is important to have done a relevant accounting and business course. After passing all four sections, you qualify to become a CPA. A wide range of roles and handsome salaries are offered based on your experience and skills.

What is an Enrolled Agent (EA)?

  • An enrolled agent (EA) is a professional authorized by the IRS. Having an EA badge is highly coveted as it is the highest credential awarded by the IRS.
  • EAs specialize in taxation, holding credentials and expertise to handle even the most complicated matters. They represent their clients before the IRS concerning audits, collections discrepancies or appeals, etc.
  • They have unrestricted freedom to choose any taxpayers from any part of the country amongst individuals and businesses. They also have the freedom to choose tax matters and the IRS office to represent their client at.
  • To become an EA, you must pass the three parts of the Special Enrollment Examination (SEE) exam. If you clear one part, you can retake others as the score stays valid for two years. Former IRS employees with technical IRS expertise and ethical practice conduct can be awarded this status.
  • After obtaining the EA status, ethical adherence becomes a must and every three years, completing 72 hours of continuing education courses. Like CPA, EA also offers a handsome salary based on the seniority level.

CPA vs EA Infographics

CPA-vs-EA-infographics

Comparative Table – CPA vs EA (Enrolled Agent)

Let us take you through a comparative table to take a deeper look at the CPA vs EA discussion.

Section CPA EA
Role Accountant, Financial Advisor, Tax Specialist, Consultant, CFO, Auditor, Controller, etc. Tax specialists who represent their clients before the IRS.
Licensing Different states have a professional body that handles licensing. The federal government, IRS.
Examination To be a professional, you must pass the four parts of the CPA exam. To be an EA, you must pass the three parts of the Special Enrollment Examination (SEE).

 

OR

If you have worked with the IRS formally, hold technical expertise related to taxation and have ensured ethical conduct, you can become an EA.

Sections in the Exam 
  1. Auditing and Attestation (AUD)
  2. Business Environment and Concepts (BEC)
  3. Financial Accounting and Reporting (FAR)
  4.  Regulation (REG).
 
  1. Individuals
  2. Businesses
  3. Representation, Practices, and Procedures.
Exam Particulars Must pass all four sections within 18 months. A minimum score of 75 on each part is required. Section test scores normally stay valid for two years giving sufficient time to pass other sections. Due to Covid-19, the number has been extended to three.

 

A scaled passing score is 105.

Cost $180 to $250 per exam section. $185 fee per exam part.
Expected Salary A CPA with a year of experience earns around $66,000 a year. The annual expected salary ranges between $ $40,000- $65,000 based on seniority.

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