If you are a CPA tax preparer and are thinking about semi-retirement, obtaining an EA (Enrolled Agent) credential might be something to think about. It allows you to continue preparing taxes and resolving tax disputes, but has the added benefit of a high degree of mobility without the need for new licensure or temporary permission to practice. So spending six months in New York and six months in Florida is an option– without a lot of strings attached. Before you drag out the suitcases and tell the grandkids you’re on the way, let’s compare the two credentials.
EA VS CPA: Obtaining and Maintaining the License
Enrolled Agents: Becoming an EA generally requires, 1) working for the IRS for five years in a position requiring the interpretation of the tax code, OR 2) passing all three parts of the Special Enrollment Exam and a background check.
Continuing Education: Enrolled agents must obtain 72 hours of continuing education every three years. A minimum of 16 hours must be earned per year, two of which must be on ethics. Since the EA credential is granted at the national level there are no additional state CE requirements.
Certified Public Accountants: Becoming a CPA generally requires, 1) obtaining an accounting degree (and possibly completing graduate courses), 2) completing two years of work experience in the accounting industry, 3) passing four exams within 18 months.
Continuing Professional Education: CPAs must meet requirements defined by their licensing state board of accountancy to maintain the license. While reporting cycles and specific requirements in designated subject areas differ the minimum hourly CPE requirement nationally, annualized, works out to 40 credit hours per year. CPAs licensed in multiple states must meet CPE requirements in all of them.
Bottom Line: While the requirements to obtain an EA credential are by no means a walk in the park, a CPA with experience in tax practice is in a good position to pass the special enrollment exam after performing some preparation and review. CE requirements for EAs are less onerous in terms of hours per year than CPE requirements for CPAs
EA VS CPA: Scope of Practice and Mobility
- represent taxpayers before the IRS for audits, collections, and appeals
- advise, represent and prepare tax returns for individuals, partnerships, corporations, estates, trusts and any entities with tax-reporting requirements
- are generally limited to preparing taxes and tax resolution
- cannot prepare and sign financial statements
- can practice in any state and in multiple states without state specific licensure or permission to practice
- perform tax, accounting, auditing, business law, and personal finance services
- act as consultants and advisers on many issues, including audits, taxes and general accounting
- are not limited to just preparing taxes and tax resolution
- can prepare and sign financial statements
- can act only for clients in the states specified by the jurisdiction of their license(s) and must obtain a new license or temporary permission to practice when accepting clients in or practicing from a new jurisdiction.
Bottom Line: The permissible scope of practice for a CPA is substantially broader than that of an EA. However, practicing from new jurisdictions means new licensure and CPE requirements. EAs must limit their client services to tax matters but can practice anywhere in the US without state specific licenses or permissions or additional CE. While it is absolutely possible for CPAs to practice from multiple jurisdictions, an EA credential may well present a simpler option for semi-retired CPAs seeking a high degree of mobility for a tax-only practice.
Surgent’s EA Course Boasts an 80% Pass Rate
The trusted name in Tax and Accounting CPE is also a trusted name in EA exam preparation and CE. Surgent’s 2015 Enrolled Agent Exam Review Course equips participants to pass the Special Enrollment Exam and earn the EA designation. Our course results in over an 80 percent pass rate and is the preferred credentialing choice of two of the top four tax preparers in the U.S. We also have the course materials exempt and non-exempt preparers need to fulfill the continuing education requirements for the IRS’s AFSP (Annual Filing Season Program) Record of Completion. If you are considering adding the EA credential to your professional profile, we are here to help. Learn more.