CPA, EA, Tax preparer, or Bookkeeper? What is the difference?

Generally, the difference between CPA vs EA vs Tax Preparer vs Bookkeeper can be significant and can have a big impact on the services you receive.

Certified Public Account (CPA)

CPA stands for Certified Public Accountant. A CPA is a license issued by State Licensing Boards. States may have some variation in its licensing requirements and also the licensing standards may have changed over time. Generally, most of the states now have similar CPA licensing requirements. But in decades past the standards may have varied substantially.

Generally, currently and within the past decade or two, in order to get the CPA license a person has to meet minimum requirements of: 1) successful completion of higher educational (usually several years in specific fields of accounting, tax, business, and law), 2) passing all four parts of a lengthy exam administered by a national testing organization (similar to attorney hopefuls having to pass the bar exam), and 3) in many states to be licensed one also is required to complete a minimum “internship” of a couple years at a qualified CPA firm doing specified work, and the vouching from qualified CPA professional(s).

After obtaining the CPA license a professional has to meet the annual state requirements of minimum continued education courses (usually averaging 40 hours per year and also may need to meet minimum requirements in certain fields or in ethics, regulations, and other areas) in order to have an active license.

If you want to verify if someone has a current active CPA license:

A CPA may specialize in certain field(s) such as auditing in certain industries or a CPA may be a generalist and have a breadth of expertise in both income taxes and accounting.

The IRS recognizes the experience and educational requirements of active CPAs and so gives the CPA many privileges to prepare, report, and represent taxpayers.

ENROLLED AGENT (EA)

An enrolled agent (or EA) is a designation that is given by and regulated by the IRS. To get the EA designation a person has to pass an IRS standardized test or work for a minimum of five years in the IRS in a qualifying position.

After obtaining the EA designation a person has to meet the IRS requirements of minimum continued education courses (usually averaging 16 hours per year and also may need to take an ethics course once every three years). The enrolled agent can prepare tax returns and practice before the IRS for clients. An EA may not represent clients in Tax Court.

If you want to verify if someone has a current EA designation you may e mail the IRS directly at e mail epp@irs.gov and include the first and last name of the person, their address, and their EA number (if available). The IRS should respond within 72 hours.

TAX PREPARER or BOOKKEEPER

The Tax preparer or Bookkeeper is not licensed nor regulated by any state or government agency. There are no minimum requirements for experience or education. The person may have one week of training or decades of experience. The only requirement for a tax preparer that is paid to prepare income tax returns is that they must have a Preparer Tax ID (PTIN) issued by the IRS. The tax preparer cannot represent you before the IRS nor represent you in Tax Court.