Why Become an Enrolled Agent?
Unlike a CPA, an EA can practice in all 50 states without needing to apply state by state to represent your clients.
The biggest advantage of being an EA is the unlimited representation rights before the IRS. Not all persons who prepare taxes can represent you before the IRS. In fact, US Treasury regulations severely limit the representation rights of a tax preparer who is not an EA, CPA, or Attorney. Those rights are diminished even more if the tax preparer has not completed the Annual Filing Season Program.
From the IRS website: https://www.irs.gov/newsroom/who-can-represent-you-before-the-irs
What is an EA?
An Enrolled Agent is an individual who has been federally authorized to represent taxpayers before the IRS. Generally, EAs are unrestricted as to which taxpayers they can represent, what types of tax matters they can handle, and which IRS offices they can represent clients before.
Will I still be able to represent clients before the IRS if I don’t participate in the Annual Filing Season Program?
As a PTIN holder, you will continue to have limited representation rights before limited offices of the IRS with respect to clients whose returns you prepare and sign until December 31, 2015. However, since 2016 only AFSP participants who obtain a Record of Completion will have those limited representation rights before the IRS for clients whose returns they prepared and signed after December 31, 2015. PTIN holders without an AFSP – Record of Completion or without other professional credentials will not be able to represent clients before the IRS in any matters for returns prepared and signed after December 31, 2015.
Attorneys, CPAs, and EAs will continue to have unlimited representation rights and can represent clients before any office of the IRS.
Should I Sit for the Enrolled Agent Exam if I’m already a CPA?
It’s definitely recommended! Many CPAs have chosen to obtain sit for the Enrolled Agent Exam and earn the credential because it provides the same IRS representation rights as a CPA. But, unlike the CPA, an EA is recognized in all 50 states. This eliminates the applying to each individual state board of accountancy each time you move. It also allows you to effectively provide services to clients in any state. This is a great benefit for accountants approaching retirement and want the flexibility of travel.
Enrolled Agents may not provide an opinion on a financial statement like a CPA, so if your practice is both assurance and tax, you will need your CPA license for any state where you do assurance work. However, if your practice is focused on tax and you want to be able to have tax clients from anywhere in the US, the EA option is a very effective option that is also very economical.