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A lot of the responsibilities of CPAs and Enrolled Agents appear to overlap, but could someone outline the key differences? When would I choose to hire one versus the other?

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Enrolled Agents typically specialize only in tax matters. Their status allows them to represent clients before the IRS (which a CPA can also do) See the IRS site regarding Enrolled Agents Their focus is much narrower than a CPA and you would only hire them for advice or representation with tax related matters. (e.g. you'd not hire an enrolled agent to do an external audit)

A CPA is a much broader certification, covering accounting in general, of which taxes are only a portion. A CPA may or may not specialize in tax matters, so if you have a tax related issue, especially an audit, review or appeal, you may want to query a prospective CPA as to their experience with tax matters and representing clients, appeals, etc. You would likely be better off with an EA than a CPA who eschews tax work and specializes in other things such as financial auditsOn the other hand if you have need of advice that is more generalized to accounting, audits, etc then you'd want to talk with a CPA as opposed to an EA

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Although they may have some similar functions, CPAs and Enrolled Agents operate in two rather different areas of the accounting "space."

CPAs deal with financial statements, usually of corporations. They're the people you want to go to if you are making an investment, or if you own your own business, and need statements of pretax profit and loss prepared. Although a few of them are competent in taxation, the one thing many of them are weak at is tax rules, and this is where enrolled agents come in.

Enrolled agents are more concerned with personal tax liability. They can 1) calculate your income taxes, and 2) represent you in hearings with the IRS because they've taken courses with IRS agents, and are considered by them to be almost "one of us." Many enrolled agents are former IRS agents, actually. But they are less involved with corporate accounting, including things that might be of interest to stock holders. That's the CPA's province.

  • CPA's are also allowed to represent you in hearings with the IRS, so are lawyers. (but it would be good to make sure you get one that specializes in taxes if you go either of those routes.) – Chuck van der Linden Jul 16 '11 at 5:37

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