The biggest differences between tax professionals come down to credentials, scope of services, and their ability to represent clients before the IRS. If you’re considering a career as a tax professional, you may be curious (or even confused!) about the variety of career options available. Tax professionals go by many titles, each tied to specific education, certification, and areas of expertise.
Tax career paths include Certified Public Accountants (CPAs), Enrolled Agents (EAs), tax attorneys, and tax preparers. How do you know which path is right for you? In the sections below, we’ll break down the qualifications, areas of expertise, and the specific types of tax and advisory services each tax profession can provide.
What is a tax professional?
A tax professional is an individual who is paid to prepare tax returns, provide tax advice, or help clients comply with federal, state, and local tax laws. This umbrella term covers a wide range of roles, from basic tax preparers to highly credentialed tax experts.
Tax professional vs. tax preparer vs. tax advisor
While these terms are often used interchangeably, they can mean slightly different things.
- Tax preparer typically refers to someone who prepares and files tax returns.
- Tax advisor usually provides strategic guidance on tax planning, compliance, and financial decisions.
- Tax professional is a broad term that includes both preparers and advisors, as well as credentialed professionals such as CPAs, Enrolled Agents (EAs), and tax attorneys.
Regardless of title, all paid tax return preparers are required by the IRS to have a Preparer Tax Identification Number (PTIN). This ensures that the preparer is registered with the IRS and authorized to prepare tax returns for compensation.
Credentialed vs non-credentialed tax professionals
Tax professionals can also be grouped into credentialed and non-credentialed categories. Credentialed professionals, such as CPAs, EAs, and tax attorneys, meet specific education and licensing requirements and may have broader authority, including representing clients before the IRS. Non-credentialed preparers can still prepare tax returns but typically have a more limited scope of services.
CPAs
Certified Public Accountants (CPAs) complete one of the most rigorous education and certification processes in the tax profession, making them among the most qualified tax experts available. CPA credential requirements vary by state, but all candidates must pass the four-part CPA exam and complete 150 hours of higher education, typically earning a bachelor’s degree and often a master’s degree in accounting.
Most states also require a would-be CPA to complete one or more years of supervised professional experience under a licensed CPA.
Because of their advanced training, CPAs can represent clients before the IRS on federal tax matters, including audits, appeals, and other communications. They are often a strong fit for complex tax situations, such as business taxation, multi‑state filings, high‑income returns, and ongoing tax planning needs.
What does a CPA do?
CPAs do much more than prepare tax returns. In addition to filing taxes, they can represent clients before the IRS and assist with issues such as tax audits, appeals, payment plans, and collection matters, often using specialized CPA tax software to manage filings, documentation, and compliance efficiently.
CPAs may also offer a wide range of accounting and financial services, including bookkeeping, profit and loss statements, financial reporting, and long-term tax and financial planning. Because of their accounting expertise, CPAs are often especially helpful for business tax returns, as well as for individuals or organizations that need ongoing accounting support alongside tax compliance.
Enrolled agents
Another type of tax professional is an IRS enrolled agent (EA), a federally credentialed tax expert authorized by the IRS. EAs specialize exclusively in taxation, and like CPAs, can represent clients before the IRS on federal tax matters, including audits, appeals, and collection issues.
To earn the EA designation, candidates must pass all three sections of the EA exam, formally known as the IRS’s Special Enrollment Examination (SEE) within two years. This three-part test covers:
1. Individuals
2. Businesses, and
3. Representation, Practices, and Procedures.
In addition to testing, EAs must also pass the IRS’s suitability check, which examines their past tax compliance and any criminal history. To maintain their enrolled agent status, EAs must complete 72 hours of continuing education every three years.
What is an enrolled agent?
An Enrolled Agent (EA) is a federally credentialed tax professional who must complete a formal certification process to prepare taxes for pay. Because the EA credential is specific to taxation, nearly all enrolled agents work as professional tax preparers focused exclusively on tax compliance and IRS matters.
EAs are authorized to represent clients before the IRS on federal tax issues, including audits, appeals, and collection of matters such as tax liens, levies, and payment plans. Their authority to represent taxpayers is granted directly by the IRS and applies nationwide.
Enrolled Agents vs. CPAs
While both EAs and CPAs can represent clients before the IRS, their credentials differ in scope:
- EAs specialize solely in tax preparation, tax planning, and IRS representation.
- CPAs hold a broader accounting credential that allows them to work in tax as well as non‑tax fields, such as auditing, financial reporting, and corporate accounting.
As a result, EAs are often a strong choice for taxpayers who need focused help with federal tax filings or IRS disputes, while CPAs may be better suited for clients who also require broader accounting or financial services.
Tax attorneys
Tax attorneys are licensed lawyers who specialize in tax law, with a primary focus on legal interpretation, compliance, and tax disputes. They are particularly well-suited for resolving complex tax issues that involve litigation, enforcement actions, or nuanced interpretations of tax statuses.
To practice, tax attorneys must earn a law degree and pass their state’s bar exam. Like other legal professionals, they are required to complete continuing legal education to stay current with changes to the Internal Revenue Code (IRC).
Many tax attorneys purse additional specialized training by earning a Legum Magister (LLM) in Taxation, a postgraduate degree focused on advanced tax topics. This background allows them to handle sophisticated matters such as IRS disputes, tax controversy cases, and legal structuring involving federal tax law.
What does a tax attorney do?
Tax attorneys provide a wide range of services focused on the legal side of taxation. In addition to preparing certain tax returns and offering tax planning and advisory services, they represent clients before the IRS in matters involving audits, appeals, and collections.
Because of their legal training, tax attorneys are especially well‑suited for cases involving tax disputes, IRS enforcement actions, penalties, and litigation, as well as situations requiring interpretation of complex tax laws under the Internal Revenue Code. They may also assist with legal structuring, negotiations with the IRS, and resolving high‑risk or high‑stakes tax issues.
Tax preparers
The title “tax preparer” is a broad term that encompasses any person who is paid to prepare tax returns. One doesn’t need CPA or EA credentials to become a tax preparer. In fact, some successful tax professionals have no credentials at all, but many serious tax preparers eventually choose to become enrolled agents.
And while tax advisors may also be tax preparers, tax preparers are typically not tax advisors, meaning they do not have the education and credentials to provide complex tax planning advice. Additionally, they cannot represent clients in front of the IRS.
What can non-credentialed tax preparers do?
Non-credentialed tax preparers can grow their tax knowledge and credibility by participating in the IRS’s Annual Filing Season Program (AFSP), a program to help serious, non-credentialed tax professionals stay informed on tax law and distinguish themselves from other non-credentialed tax preparers. The AFSP requires 18 hours of continuing education credits, including a six-hour Annual federal tax refresher (AFTR) course and subsequent comprehension exam, ten hours on federal tax law, and two hours on ethics.
Service bureaus
Service bureaus provide tax preparation software you can resell, branded under your own label. They also provide technical support and professional guidance to those who buy your branded software. As a tax professional, if you decide to operate a service bureau, you can increase your firm’s revenue by building a network of tax offices and helping other business owners find reliable tax preparation software, as a service bureau reseller.
What is a service bureau?
A service bureau offers tax software and professional guidance to business owners. They help tax professionals run their tax business and serve clients with up-to-date tax filing software.
If tax law interests you and you’re looking for a way to start your own business, there are an array of career options for tax professionals, from tax attorneys to tax preparers. And a great way to start exploring a career or business opportunity in tax law is to start as a tax preparer.
