Discussion:EA vs CPA food for thought

I have been an EA since 1993. I do not belong to any EA societies because I do not think that they can provide me with anything I can't get through the IRS or internet in the way of resourses. But, mostly because I do not think they do a decent job of getting the public familiar with EA means relative to tax prep. I have nothing against CPA'S however, in many instances the use of an EA is just as good if not better in certain circumstances than that of a CPA. It is irritating to hear financial "wizards", the likes of Dave Ramsey, etc, to recommend a CPA rather than a CPA or EA when addressing a tax issue. I would be curious to know the percentage of CPA's that take tax CPE courses rather than accounting CPE courses. EA's are just as, if not more, qualified to handle compliance, IA and OIC issues as well as tax prep. No offense intended. taxea

I agree with Taxea, I save any membership fee because right now I don't see the benefit of NAEA for example, in my situation. The public doesn't generally understand the distinction of an enrolled agent and "mainstream" public discourse doesn't promote it strongly.

I never thought of memberships that way, Taxea. I have a $190 subscription to a glossy magazine, about a quarter of which is devoted to organization business. Come to think of it, I can recall one issue where pages were given over to an alternative tax system being pushed by a learned person, but one not even on the horizon yet.

no offense intended

I guess what I'm saying is that even though I am a CPA, if I'm looking for tax advice, I'm more likely to look for an EA than a CPA because CPA doesn't necessarily mean tax expert. EAs are definitely suffering from a lack of marketing savvy. The AICPA has done a stellar job in that regards. Maybe too good of a job.

just my $0.02.

-jerry

I don't quite see how an accurate (and polite I would say) reply to a client on CPAs' areas of expertise is an attack. The fact is, that it does depends on the individual CPA, whether his or her expertise includes tax law. Jerrykern has it right on.

Doctors can't do taxes either.

Even rocket scientists need a good tax pro.

CPA's, like attorneys, are presumed to be tax saavy.

Experts in big companies or experts in little people: make your choice.

Now there about 1.2 million attorneys and probably something less than 2 million CPAs nationwide. We EAs are a very small group indeed.

I just received a voicemail from a local franchise tax preparer looking for an EA for one of his clients. He got my name from the NAEA locater profile and called me EVEN THOUGH that profile says that I am not in practice. Those who know about us are anxious to send us work. But when I talk to the guy, I'm going to have to send him to a local CPA who is an ex-IRS employee and does representation. There ISN'T anyone else.

As to joining the NAEA? I have yet to receive an issue of the EA Journal that didn't teach me something useful. If you believe that the NAEA isn't doing a good job of promoting EAs, rather than complain, why not join and get involved? I pay NAEA dues because the NAEA is the ONLY national organization that is doing anything towards national publicity.

I also pay ABA dues for somewhat similar reasons...I don't like the American Bar Association very much but it is the SOLE lawyers' organization with the nationwide clout to accomplish some very necessary policy and legal changes which I favor. And let me tell you...the ABA Journal is almost valueless as a practice aid and ABA dues are three times what NAEA charges. Nevertheless, I pay those dues because that's my only real vehicle for change.

Well then, send him a letter, laying out the positive qualifications of EA's etc., and sign it "Rev. John Doe, EA".

In this way, he might think by insulting you, he has insulted your entire congregation of thousands. And, I would imagine when it comes to Ramsey's "money supply", he'll take an interest.

I'd love to see Ramsey and Suze Orman get hooked up, or at least have a torrid affair.

By diluting an already diluted gene stock, they could produce a bevy of even more financially mediocre advice hounds.

Perhaps Dr. Phil will lend them his vacation home for the tryst.

P.S. Of course, I speculate that Orman may be a lesbian, but I know my preacher has had dozens of affairs with every stripe of receptacle imaginable, and I don't think that that would put Ramsey off too much. It shouldn't, he's a Christian.

I have to apologize for being such a curmudgeon today. I think I am anticipating many upcoming re-runs of the Dicken's classic "A Christmas Carol". I sure could use a Tiny Tim to clean out my gutters right now, I wonder if he does chimneys?

I think same-sex marriages should be recognized also. For years, the criticism was made by these bigots that gays were unstable and had sex with everyone. Why then do these same bigots deny them the opportunity to settle down into a legally sanctioned marriage; since theoretically that should encourage a less promiscuous lifestyle?

I would have to say I agree that EA's are not well publicized and I would be curious to compare in a survey the different responses you would get from people if you ask them what is an EA vs a CPA and what do they do for a living. Personally, I would refer clients to either but I also realize that no matter if they are a CPA or an EA, there are the good and the bad in each field.

Being an Enrolled Agent also sounds like you work for the IRS and I don't know if that effects anyone's decision on whether or not they want to use an EA to prepare their taxes.

Being as you have just been studying for the (endless) CPA exam, maybe you know the answer to this question.

In another thread, someone posted a link to the CPA Journal stating that a CPA could not offer tax advice or representation except in states where she is licensed even if that CPA does not use the "CPA" title. Leaving aside whether any attempt at professional discipline would hold up in the Courts, would the situation be any different for a CPA practicing under her EA enrollment?

As an aside, I don't believe that any state bar association would attempt to discipline an out-of-state lawyer for undertaking Cir. 230 representation so long as the lawyer was careful not to imply bar membership.

Generally, the client could care less, as long as the professional is sober, and in some way appears to be on the ball.

The vast majority of the public has absolutely no idea how complex the tax law is, and the government does everything it can to hide the fact of it's complexity by blaming all mistakes made on the preparer. At least nowdays they do. And the government does this knowing full well that they have no idea of what most of the law means themselves.

Boy howdy. I started my current LL.M.(Tax) program as a lawyer and an enrolled agent and even I had no idea how complex, murky, and dense the Code is. I am embarrased to admit that I was shocked when my hard copy of the Code and Regulations arrived in a CRATE.

14 - hours - accounting / 57 - hours - tax

All in 2008 and CPA license is not due until 01/2010 so some might think I am a little CPE heavy although I look at CPE differently. One can never have enough!

Will have similiar cpe hours in 2009 including an additional 8 hours in fraud.

To be licensed in CA, one needs 80 hours of CPE every two years with no less than 20 hours in any given year (I think this is an AICPA req but don't quote me on this). If one issues finacial statements (I do), they need 24 hours in accounting every two years along with 8 hours of fraud every two years. One must also have 8 hours of ethics every six years.

Explaining to Joe Citizen that the EA is recognized by the IRS as a tax expert does not equate to that an EA works for the IRS. This I make clear to my clients and anyone else who asks. And, Kevin, I have watched Dave Ramsey daily for several months. He may have recommendations to EA's on his website but I have never heard him recommend to a listener/watcher to consult with an EA. It is always consult with a CPA. I have written to him about this and gotten no response privately nor has he changed his diatribe on-air.

interesting take from the AICPA site:

"5) Are CPAs and accountants the same thing?

Yes and no. All CPAs are accountants but all accountants are not Certified Public Accountants. The principal differences between accountants and CPAs are education, experience, and opportunity. Becoming a CPA is a challenging goal, but one very much within your reach.

In order to become a CPA, there are education and experience requirements you'll need to fulfill, and a uniform exam that you must pass. Receiving your CPA certification distinguishes you from other business professionals - you will benefit from increased trust, opportunities, and financial rewards."

If you take Kevin's latest post and change CPA to EA and accountants to tax preparers...then you have exactly the reason they are being compared. A CPA does not have the tax expertise of an EA...An EA does not have the accounting expertise of a CPA. I would not recommend an EA to a client that needed accounting expertise and I don't understand why so many professionals recommend a CPA for tax purposes. I submit the reason is that Joe Citizen does not know what an EA is or does. The definition of an EA, simply stated, is: "one who is RECOGNIZED by the IRS as a tax expert". Don't see any confusion between that and "one employed by the IRS." taxea

"No, I am an Enrolled Agent."

I should now recite Taxea's wonderful description, but I am curious so I listen. I keep hoping against hope that we have educated the public.

"You mean you work for IRS?"

It's that word "Agent" that grabs them everytime, so I go on and explain the IRS-given examination, the CPE I take every year and the fact that taxes are my speciality.

IRSfixer hit it on the head! In any field there are incompetent people. I am not a CPA/EA (started studying for the EA exam) and I have seen tax returns prepared by CPA firms in a FUBAR condition. The public is already conditioned and associates "tax" with "CPA". Ask them about an Enrolled Agent and you will get, "huh?"