If you are exploring a career as a tax professional, you’ve likely questioned the difference between an enrolled agent and tax preparer, tax preparer and CPA, and EA and CPA. Understanding these distinctions is essential, because Certified Public Accountants (CPAs), Enrolled Agents (EAs), and tax preparers all hold different credentials, specialties, and levels of authority under U.S. tax law.
A Certified Public Accountant (CPA) is licensed by a state board after completing a degree in accounting, passing the CPA exam, and maintaining ongoing continuing education requirements. An Enrolled Agent (EA) is a federally authorized tax advisor who passes the EA exam or qualifies through IRS experience and must complete 72 hours of continuing education every three years. EAs specialize in individual and business tax matters. Tax preparers without these advanced credentials can still assist in filing returns, provided they hold a Preparer Tax Identification Number (PTIN). If you’re considering a career in the tax industry, here are some guidelines to understand the differences and the overlaps among these roles.
What is a Certified Public Accountant (CPA)?
Certified Public Accountants (CPAs) undergo the most rigorous credentialing processes and are some of the most qualified tax professionals available. To become licensed, candidates must typically earn a degree in accounting, pass the Uniform CPA Exam, and meet state board requirements that may include additional coursework, verified work experience, and ethics training. After getting licensed, CPAs maintain their credentials through continuing education, ensuring they stay current with changing tax laws and standards.
Beyond preparing individual and business returns, CPAs are tax experts qualified to deliver a broad range of services. They may also provide bookkeeping services, help clients with long-term financial planning, prepare profit and loss statements, and conduct audits, just a few of the professional tasks they are qualified to accomplish. Because CPAs handle such a broad range of financial tasks, many rely on software tailored to CPA workflows for accuracy and efficiency. CPAs are also uniquely qualified with full representation rights before the IRS, unlike tax preparers. They can represent taxpayers on all tax matters at all administrative levels.
Education requirements for a CPA
Most CPA candidates must complete 150 hours of higher education, usually resulting in a bachelor’s (and often a master’s) degree in accounting. In addition to the higher education requirement, candidates must pass the Uniform CPA Exam, a rigorous four-part CPA exam. This exam covers topics including:
- Auditing and attestation – To assess your understanding of auditing procedures and standards
- Business environment and concepts – Evaluating knowledge of business operations, structures, economic principles, and financial management concepts
- Financial accounting and reporting – Key accounting principles, like Generally Accepted Accounting Principles (GAAP) and the International Financial Reporting Standards (IFRS)
- Taxation and regulation – Understanding relevant laws, regulations, and ethical standards that govern financial practices
Note: CPA credentialing is not one size fits all. Requirements vary by state and jurisdiction, as each state board sets its own rules for education, acceptable coursework, and standards. In addition to the CPA exam, most states also require one or more years of supervised professional experience under a licensed CPA before they can obtain their CPA license.
What is an Enrolled Agent (EA)?
Enrolled Agents (EA) are federally authorized tax professionals who have unlimited representation rights before the IRS, including audits, collections, and appeals. EA status is the highest level the IRS awards to preparers. Enrolled agents must undergo an EA certification process focused specifically on tax preparation and representation.
When comparing EA vs. CPA, it’s helpful to note that while both are qualified to assist with tax-related services, they serve different roles.
CPAs may work in diverse fields, like forensic accounting, corporate finance, or financial planning. In contrast, the EA credential is dedicated solely to tax representation and preparation, making Enrolled Agents uniquely specialized tax experts with deep experience in interpreting tax laws, preparing complex returns, and advocating for clients across IRS jurisdictions. H3: Education requirements for an Enrolled Agent
Education requirements for an Enrolled Agent
Becoming an enrolled agent requires demonstrating expertise in federal tax laws and taxpayer representation. Most candidates earn EA status by passing all three parts of the IRS’s Special Enrollment Examination (SEE) within a two-year period. This three-part test covers:
- Individuals
- Businesses
- Representation, Practices, and Procedures
Preparing for the EA exam typically takes three to six months and should include comprehensive study guides, practice exams, and focused reviews of each section.
In addition to the exam pathway, there is an alternative route. Individuals can qualify for EA status by completing five years of continuous experience in tax-related roles at the IRS. This IRS experience exception recognizes professionals who have already demonstrated substantial tax knowledge through their government work.
All Enrolled Agents, regardless of how they earned their status, must pass the IRS’s suitability check, which reviews past tax compliance and any criminal history. To maintain Enrolled Agent status, EAs must complete 72 hours of continuing education every three years.
What is a tax preparer?
A tax preparer is any individual who is compensated for preparing or assisting in the preparation of federal tax returns. This broad category includes everyone from highly credentialed professionals to non-credentialed preparers who may have limited formal training. Anyone who prepares taxes for compensation must hold a valid Preparer Tax Identification Number (PTIN), but not all tax preparers are required to have specialized education, certifications, or advanced credentials.
With this broad category, CPAs and Enrolled Agents (EAs) represent the most qualified tiers of tax preparers. Both hold credentials that require extensive training, examinations, and ongoing continued education. Because of their advanced expertise, CPAs and EAs have unrestricted representation rights before the IRS, unlike non‑credentialed tax preparers, who have limited representation rights and can generally only assist clients with issues directly related to the returns they personally prepared.
While many tax preparers can successfully support clients with basic filing needs, staying a non‑credentialed preparer does come with limitations. Without an EA or CPA credential, you’ll be restricted in the types of tax matters you can handle and, in your ability, to represent clients before the IRS. Non‑credentialed preparers generally have limited representation rights, meaning they can only assist clients with issues directly tied to the returns they personally prepared, excluding more complex situations like audits, appeals, and collection cases.
Education requirements for a tax preparer
You don’t need the credentials of a CPA or EA to become a tax preparer. In fact, many successful tax preparers operate their tax practice without any formal qualifications. However, the IRS advises taxpayers to be selective when choosing someone to prepare their taxes. To increase their credibility and advance their careers, many serious tax professionals eventually choose to become enrolled agents.
Regardless of additional credentials, if you plan to become a tax preparer and submit returns, you must register for a Preparer Tax Identification Number (PTIN) with the IRS.
The Annual Filing Season Program
Non-credentialed tax professionals can strengthen their tax knowledge and enhance their credibility by participating in the IRS’ Annual Filing Season Program (AFSP). The IRS created the AFSP to help tax preparers without advanced credentials stay current on tax laws and distinguish themselves from other non-credentialed tax preparers.
To earn the AFSP Record of Completion, participants must finish 18 hours of continuing education credits, which includes:
- A 6-hour Annual Federal Tax Refresher (AFTR) course and comprehension exam,
- 10 hours on federal tax law education
- 2 hours of ethics training
Completing the program also allows prepares to be listed on the IRS’s Directory of Federal Tax Return Preparers, giving them added visibility to potential clients.
However, AFSP participation does not grant the same representation rights as CPAs or Enrolled Agents. AFSP preparers receive only limited representation rights, meaning they can represent clients only for returns they personally prepared, and only before certain IRS employees. They cannot represent clients in audits, appeals, or collection issues. In contrast, CPAs and EAs have full, unlimited representation rights before the IRS.
Comparing a CPA vs tax preparer
What’s the difference between atax preparer vs. CPA? Both can prepare taxes, but tax preparers specialize in this area. On the other hand, CPAs can provide tax preparation services but are also qualified to offer a wide range of professional expertise. Many CPAs don’t perform tax preparation at all, as their education qualifies them for roles such as financial advising, tax planning, auditing, and bookkeeping services.
Are all CPAs tax preparers?
CPAs, EAs, and tax preparers are all tax professionals. However, since CPAs have several career options, not all CPAs become tax preparers. Many work as government accountants, auditors at public accounting firms, or in-house accountants at small and large businesses.
A CPA has all the necessary credentials, knowledge, and skills to be a tax preparer, but many choose careers outside of tax preparation, like private accounting or auditing. Similarly, many tax preparers are not CPAs, as this certification is not a prerequisite to being a tax preparer. They may be IRS enrolled agents or have no credentials at all.
Which is better: EA vs CPA?
It depends on what kind of tax expert a person or business needs. The CPA credential is more challenging to obtain, but that doesn’t necessarily mean a CPA tax preparer is a better fit than an enrolled agent.
Individuals and businesses with complex tax returns often turn to the expertise of a CPA who specializes in their tax situation. However, CPAs can work in a broader range of fields than enrolled agents. Those who specialize in non-tax areas, such as audit and accounting, may not have as much practical day-to-day experience in tax preparation. Enrolled agents focus specifically on tax-related matters, making them experts in the intricacies of tax law and regulations. This specialization allows them to handle a wide variety of tax situations for individuals and businesses.
Both EAs and CPAs hold full representation rights before the IRS. This means both are able to represent clients dealing with an audit, responding to inquiries, or resolving disputes in front of the IRS. Ultimately, the choice between an EA and a CPA depends on your specific need—whether it is more specific to comprehensive tax support or a wider array of financial services.
What kind of tax professional do you want to be?
If you’re a current or aspiring tax professional deciding which credential to pursue, your choice should align with your long-term goals, preferred work style, and the level of expertise you want to offer. A major consideration is whether you’re willing to invest the time and cost required to become a Certified Public Accountant (CPA). This process typically involves 150 hours of college courses, which can cost anywhere from $3,500 to over $10,000 depending on the institution and program length. For those who complete it, the CPA credential opens an expansive career path, including tax preparation, auditing, financial planning, and accounting specializations.
Many CPAs decide to become CPA tax preparers as a second career to supplement retirement income, engage in seasonal rather than full-time work, or keep certifications current for employment opportunities that might arise down the road. Like other tax professionals, many CPAs, EAs, and non‑credentialed preparers operate as self‑employed practitioners or small business owners, giving them control over their client base, work environment, and earning potential.
If 150 hours of college credit isn’t feasible for you and you’re sure you want to become a tax expert, the EA credential may be a better option for you. The total cost to become an EA is generally lower, ranging from about $1,000 to $3,000 when considering preparation materials and exam fees. You’ll gain nearly all the knowledge you need to be a tax professional and stand out to potential clients because of your IRS certification. While you’ll still need to put in considerable work to pass the Special Enrollment Examination, the process isn’t nearly as long or expensive as becoming a CPA.
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