Choosing an Enrolled Agent Vs CPA
What are They And Which is Best for You?
First: Understand your legal needs
Determining which tax professional to employ during tax crises is a vital task. The ultimate decision is certainly based on your specific situation. Both of these tax experts have unique skill sets they offer. Enrolled Agents and (Certified Public Accountants ) CPA's both have their distinctive strengths. Creating a matrix of pro’s and con’s of these strengths can help you visualize the benefits of each pertaining to your state of affairs.
In spite of any differences, there are also many similarities between CPA’s and Enrolled Agents. Either can assist you in preparing and filing your taxes. Both Enrolled Agents and CPA's must undergo rigorous tax accounting training as well. Select your CPA or Enroll Agent as you would any financial partner; typically, your selection results in a continuing business relationship for many years. In your matrix, place the skills, characteristics, confidence level, convenience level you require.
Second: Research which is best for you
Why Choose a Certified Public Accountant (CPA)
For the most part, you will find CPA's to be pricier than enrolled agents. CPA’s have a highly specialized skill, especially as it pertains to tax accounting. CPA's are fully capable of working with you on many complex issues such as investment strategies and estate planning to long-term tax planning.
CPA’s specialize in tax issues fundamentally associated with accounting or bookkeeping. Each state has guidelines and regulations to govern CPA activities. Their activities might include deductions, investment valuations, and investment planning. CPA’s assist entrepreneurs to set-up accounts and establish bookkeeping procedures. They also aid in the preparation and interpretation of quarterly and annual financial statements.
Certified Public Accountants are essential to routine financial business matters.
Why Choose an Enrolled Agent?
The US Treasury authorizes enrolled agents to represent and act in behalf of taxpayers, in regards to certain tax matters, such as personal and business income tax returns. Enrolled agents were originally instituted by the US treasury to investigate fraudulent claims against the United States in the post Civil War period. Under the Enabling Act of 1884, also known as the Horse Act of 1884, Congress gave the treasury the power to regulate who could represent taxpayers in tax matters.
There are several specific tasks enrolled agents are capable of doing in your stead:
• Counsel individuals and households on estates, partnerships, businesses and trusts
• Guidance in the midst of IRS notices and audits
• Provide relief from levies, wage garnishments, and liens
• Filing an Offer in Compromise
• Decreasing tax penalties
• Represent clients in negotiation with the IRS regarding tax relief arrangements
• Administrative Appeals involvement
• Prepare Tax Returns and Tax Forms
• Common audit inquiries that span several years
• Payroll tax problems
Third: Choose the best to employ
If your tax troubles fall mainly into one of the above categories, an enrolled agent would be the best tax professional for you to contact. On the other hand, tax concerns pertaining to bookkeeping and accounting are most likely a better fit for CPA’s.
In a nutshell, the distinction between an Enrolled Agent vs a CPA is simple. Enrolled agent's area of expertise focuses on income taxes, both for individuals and small businesses; and they are authorized to act on your behalf. Certified Public Accountants expertise focuses on taxes (including bookkeeping), personal finances, real estate holdings, and corporate taxes.
The ultimate decision is yours; take your time and make the selection right for you.