My sister is living in the boonies and is going to have an EA do her taxes this year instead of a CPA, is there a difference?

 

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Just in the price they charge. CPAs have guidelines to follow if I remember correctly. I think Mo is one. I am not I am an EA.

 

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Thanks I've always had a CPA do mine because they throw it as a bonus when they do both companies so I wasn't sure.

 

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I know Enrolled agents (EAs) which I take professional development courses from. They are as competent as anyone. However, I'm biased in general towards a CPA. I would not choose a n individual who is not from one of these categories, unless you are going to choose an Attorney-CPA, with an llm specialization in taxation. Baym may have the llm. This is truly overkill, like a CPA prepping a short form.

There are CPAs and CPAs. I went the extra distance and earned a masters degree in Taxation. Still, the tax law is so fluid, your knowledge can become obsolete quickly, if you dont take your continuing education seriously. The masters program gives you a foundation in the core common tax law cases. I can do most administrative procedures through appeals, which an attorney can do. CPA or EAs cant cross the bar-thats the attorneys domain. Any criminal issues require a referral to an attorney. Make sure she gets the practitioners license number and double checks it with the proper regulatory body. She should check with the better business bureau, too.

In summary if the engagement is tax representation, you will look for an additional skill set than a tax preparer.

 

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EA's are tax specialists, CPA can be....but might not be.

The guy who always does my taxes is an EA who also happens to be a CPA and he has an MBA.

He told me that for personal returns (1040), an EA is usually preferable, but if you get in hot water or are filing a 1065 (which I file every year) a CPA is not only preferable, but usually required.

So the only people that can represent you in an action by the IRS would be a tax attorney, a CPA or an EA?

 

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I'm an EA, too. I got the designation automatically when I was commissioned as an Internal Revenue agent. I never used it because Im a CPA. Ptilk, EA's can prep any business return (e.g. partnership; S corp C corp Estate , Trust etc). CPAS must qualify in taxtation in the CPA exam. They then choose their path of specialization, audit, tax or otherwise. A CPA with a MS in Tax and current knowledge in your industry is important. I do many entertainment clients (e.g. performing artists, screenwriters, graphic artists , fashion designers etc. My forte is not inventory intensive industrial corporations. Probe the professional for their concentrations.

It really just depends on the engagement. if you are looking for a tax rep in an IRS audit or other issue, get a CPA or EA, with experience in the IRS. They will refer you to a tax attorney if necessary, if they are competetent. You cant be good at everything if you are a sole practitioner. This is why so many professionals practice as partners.

 

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My grandfather started us with our CPA firm in the late 50s on the sole thought that you want a Jewish accountant for your taxes.

 

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I just finished a Jewish attorneys return and I have many Jewish clients. Jewish CPAs have a reputation for excellence. They are naturals. But never underestimate an Italian consigliori CPA or EA like Tyche or me.

 

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I got in a LOT of hot water with the IRS a while back. I went from being an employee of a corporation, to an owner of a business and didn't understand the changes in tax law concerning expenses and how they are treated.

Long story short, I ended up owing the IRS almost 800K. That's when I enlisted the aid of my good friend Brett (EA, CPA, MBA). Worked out a deal with the IRS that allowed me to keep my assets and pay off my bill over time.

I paid 8300 bucks a month for years. Just made the last god damn payment on March 1st. Brett, as a CPA, was able to legally certify audits and other financial tests, an EA would not be (according to my understanding of the situation, I could be wrong). His assistance during this time was worth whatever the hell I ended up paying him.

Starting next year, I'll should be able to file a simple 1040 and forget it. I have no business interests left. My LLC still exists, but has, basically, no assets and no liabilities. Not sure how that works...have to look into it.

I did have to enlist the aid of a tax attorney (in addition to my CPA buddy) during my wranglings with the IRS. He was worth every penny I paid him. I ended up paying the IRS less than 400K even though I "owed" them 800K.

Not sure where I'm going with all this, but I'm trying to say that a your needs as a tax filer depend upon your situation, and that an EA is every bit as qualified in most instances as a CPA. There are good ones in both camps, and some of them are good (or bad) in both camps. I think.