Seeking a career in taxation or accounting? The terms “EA” (enrolled agent) and “CPA” (certified public accountant) often come up. Both are respected credentials, serve different purposes and carry unique benefits.
EA vs. CPA: understanding the differences
Key differences include scope, earning potential and flexibility.
Scope of practice
CPAs are licensed by individual states and have a broad scope, allowing them to perform audit, attest and financial accounting services in addition to tax work. EAs, on the other hand, are federally licensed by the IRS and specialize exclusively in taxation. Their authority spans all 50 states, which makes them especially valuable for clients with multi-state tax concerns.
Earning potential
CPAs typically earn more on average due to their versatility and ability to work in various sectors like audit, corporate finance and consulting. However, EAs can command competitive salaries, particularly in tax-heavy environments such as tax firms, government agencies or private practices by focusing solely on tax preparation and representation.
Professional flexibility
Because EAs are federally authorized, they can represent clients before the IRS regardless of the state they live or work in. This gives them more mobility, which is especially useful in remote work settings or multi-jurisdictional practices. While highly respected, CPAs must maintain compliance with state-specific licensing rules, which can be limiting if they move across state lines.
Common misconceptions about CPAs and EAs
One common misconception is that CPAs are always more qualified than EAs. EAs offer specialization in federal tax matters depending on the work being performed. Another myth is that EAs are somehow “lesser” because they don’t need a degree to qualify. While it’s true that CPAs must meet rigorous education and experience requirements, EAs must pass a comprehensive three-part IRS exam or have relevant IRS work experience. Their knowledge of tax law is tested thoroughly, and their continuing education requirements ensure they stay current in a rapidly changing tax landscape. EAs often have deeper tax knowledge than CPAs.
Can an enrolled agent do everything a CPA can?
Not exactly. While EAs and CPAs have unlimited representation rights before the IRS, EAs are limited to tax-related matters. Depending on state regulations, CPAs can also perform financial audits and attestations – services, which EAs are not authorized to provide. However, when it comes to tax expertise, EAs often have the edge due to their specialized training and IRS-focused knowledge.
Why would CPAs want to earn the EA credential?
Although CPAs already have the authority to represent clients before the IRS, many choose to pursue the EA designation to deepen their tax expertise. Unlike the CPA exam, which covers a wide range of accounting topics, the EA exam focuses exclusively on federal tax law and IRS procedures. For CPAs that do not offer audit or attest services, the EA designation can be a smart way to specialize in tax services as well. CPAs can stay current on tax changes and improve their confidence when handling complex tax matters, such as federal audits, appeals or collection issues.
Is the EA exam easier than the CPA exam?
The EA exam (Special Enrollment Examination or SEE) is almost solely focused on federal tax law and IRS procedures. It consists of three parts and is considered more accessible, especially for those with hands-on tax prep experience. No additional education or work experience is required to pass the exam. The CPA exam consists of four sections covering accounting, auditing, business concepts and regulation. In addition to the exam, the CPA designation requires 150 credit hours of education and (in most states) at least one year of supervised experience.
Final thoughts: EA, CPA or both?
In deciding between the two, consider the career path that interests you most. The CPA license could offer a better path for a broader accounting career with audit work. The EA designation is the best option for tax professionals focused on tax prep, planning and IRS representation. Want to stand out in the tax field? Why not consider earning both?
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About National Association of Tax ProfessionalsThe National Association of Tax Professionals (NATP) is the largest association dedicated to equipping tax professionals with the resources, connections and education they need to provide the highest level of service to their clients. NATP is comprised of over 23,000 leading tax professionals who believe in a superior standard of ethics and exemplify professional excellence. Members rely on NATP to deliver professional connections, content expertise and advocacy that provides them with the support they need to best serve their clients. The organization welcomes all tax professionals in their quest to continually meet the needs of the public, no matter where they are in their careers.
The NATP headquarters is located in Appleton, WI. To learn more, visit www.natptax.com.
Information included in this article is accurate as of the publish date. This post is not reflective of tax law changes or IRS guidance that may have occurred after the date of publishing.