Would you trust an Enrolled Agent to do your taxes?

Question

There's not a lot of info out there on enrolled agents, but they are just as qualified as CPAs to do taxes. They must pass a 3 part test that is created by by the IRS.

I've been thinking about getting my EA certification because i'm personally interested in tax and it can save me money down the road by not hiring someone. Also, was thinking about maybe branching out and preparing tax returns for real estate investors.

My question is would any of you trust a non CPA such as an EA to do your taxes?

Brandon Hall · Answer

I'd trust an EA depending on what their background is. I wouldn't touch an EA with a ten ft pole if they didn't previously have the proper tax experience.

And even though a CPA is a more rigorous cert, I likely wouldn't allow them to prep my taxes without proper experience either. The only difference in consideration would be that the average person with a CPA has the brain power and the staying power to make it through the CPA exam, which is tough.

So anyway, to sum up, a CPA will be easier to sell clients on, but an EA is fine. At the end of the day, accuracy and value is what matters most.

Steven Hamilton II · Answer

Sadly, I know preparers with NO credentials that are extremely knowledgeable. I also know EAs who I wouldn't trust with an EZ. It depends upon the person.

If she needs advice feel free to have her Message or email me. I know some great study groups and have some tips for education.

John Woodrich · Answer

I agree with you 100% Steve, I got carried away in my posts above, it was late and I was on my phone.  The post was was about whether someone would trust an EA. Sitting across the table as a CPA I would give 100% respect to an EA. People who pass the EA designation have dedicated themselves to tax and I have worked with EAs who were more than competent and cared for their clients.

If I were you I would focus on where you would like to make your money. If you are hoping to do taxes part-time and real estate part-time, you will be bad at both. I work full-time as a CPA  and I'm working on  rearranging my affairs with a goal of my rental income surpassesing  my current  earnings.  it will take some time however I would prefer to make money getting a check in the mail then showing up to work.

Steven Hamilton II · Answer

John,You'll note I was in no way trying to discredit CPAs. My statements were that you have people in both camps who know plenty. I was stating as I've said many times before that people need to make sure their CPA knows tax and has plenty of CE in taxation. I'm not going to get into an EA vs CPA argument with you as that is irrelevant. People need to do their own due diligence no matter who they hire. And my comment about EAs getting a bit more respect is because auditors have plenty of hot shot CPAs and attorneys walk in like they own the place. The auditor knows the EA has a specific level of competence in tax matters since the IRS puts out the guidelines for the exam itself. As I've said before I know plenty of CPAs who know plenty. I also know some without credentials. I also have several friends CPAs AND EAs who have the USTCP credential who run laps around many.So lets just agree that we have our own viewpoints. And frankly at some point I myself plan to sit for the CPA exam; however, frankly it does nothing for my business that I can't already do.  I don't plan to do attestation work nor will. That gets referred out to someone who enjoys that work.

Alex Shipp · Answer

Thanks for your replies.

That's my fear is that some people may not trust non CPAs to do their taxes no matter how much experience and other relevant certifications they have. Personally, I'd probably rather an EA do my taxes, because their entire knowledge is in tax and most likely charge less than CPAs.

John Woodrich · Answer

@Steven Hamilton II

H&R Block uses the same approach in trying to discredit CPAs - not all work in tax.  You are correct, not all CPAs work in tax but saying that an IRS agent gives more credibility is ludicrous.  There may be some auditors who are CPAs who try to practice tax for a living but any reputable CPA firm is going to have a Tax person work on taxes.  CPAs have their own continuing education requirements and a tax guy would not be taking accounting or auditing classes, they take classes in tax.  Dumb argument.  Saying someone knows taxes backwards and forwards means nothing.  I have a masters in tax and work 2400 hours in the profession every year, there is a lot I do not know and there is a lot I will never know.

Steven Hamilton II · Answer

Brandon,

I will agree with you completely; however, many EAs do NOT want to do public accounting in any way shape or form. They want to focus on small business clients. They are two DIFFERENT credentials. One proves accounting knowledge and may test a couple tax questions; whereas an EA will know more tax than accounting.

CPAs are more well known and assumed as knowledgeable in tax; however, not all focus on or understand tax issues.

Both credentials have their purpose.

Steven Hamilton II · Answer

Your tone is quite insulting. I for one can tell you becoming an EA is not an overnight process.  Most CPAs do NOT do tax returns.  EAs specialize in tax.  CPAs know accounting.  I personally have quite a few clients who are licensed CPAs. I have many colleagues who are both and find being and EA gives them much more credibility with an IRS agent than their credentials as a CPA. Why is this?  Because an Enrolled Agents know tax backwards and forwards.CPAs are not required to take any CE in taxation. Enrolled agents are required to take all of their CE in taxation. If you want tax planning call an EA or a CPA who knows tax.  But make sure you know what their CE was taken in.

John Woodrich · Answer

A CPA and an EA are not in the same class. Both require a level of skill but a CPA requires years of dedication and an unmatched proficiency. You can find Joe Blow off the street who can get your taxes done or you can find someone who knows what they are doing. The CPA designation is not given away after a test but given away after experience and a test. The most trusted advisors are CPAs so your call who to contact.

Steven Hamilton II · Answer

Alex,There are three types of people who can represent you in front of the IRS.  Enrolled Agents, CPAs and attorneys.  An EA is required to do all of their CE in tax. Feel free to PM me if you'd like to talk. As and EA I'm sure I can give you some advice on the topics.

Would you trust an Enrolled Agent to do your taxes?

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