When it comes to your career, it’s good to have choices. These choices might relate to the company you work for, the location of your office, the hours you work, or your specialization. For those of us in the accounting and finance fields, one of the most important choices we can make is how far we want to take our careers. More specifically, which professional certification should we choose to help us reach our goals?
If your career goals involve working in tax or public accounting, then you should consider getting one or both of the following certifications: the enrolled agent (EA) or the Certified Public Accountant (CPA). And to decide between the 2, you need to understand all the similarities and differences. Thankfully, using this EA vs CPA comparison, you can do just that.
First of all, you need to know what an EA and a CPA are and what they do. Enrolled agents are tax preparers with unlimited representation rights before the IRS. The IRS provides this formal definition for EAs:
“An enrolled agent is a person who has earned the privilege of representing taxpayers before the Internal Revenue Service. Enrolled agents, like attorneys and certified public accountants (CPAs), are generally 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.”
EAs can work for several different types of clients including individuals, corporations, partnerships, estates, and trusts. Basically, EAs can represent any client that is required to report and pay taxes.
On the other hand, Certified Public Accountants work for businesses that require accounting and tax services. Typically, their responsibilities include preparing financial accounts, providing audit services, and offering tax expertise. And according to the above definition, CPAs also have unlimited representation rights before the IRS.
However, one of the most important differences between the 2 designations is that of licensure. As a CPA, you have a license to practice. Comparatively, as an EA, you do not have a license to practice. As such, you may think the EA title isn’t as highly regarded as the CPA title.
But this is not the case, as the accounting industry widely recognizes and greatly respects EAs. In fact, most CPAs choose not to perform tax services. Therefore, EAs tend to have more tax expertise than CPAs and are considered the top choice for handling these matters.
All in all, the steps to becoming a CPA and becoming an EA are quite similar. In most cases, you’ll have to qualify for and pass a multi-part exam to earn either title. However, you’ll find varying degrees of difficulty in the exam prerequisites and the exam format.
The IRS has minimal enrolled agent requirements. To get started, you simply need to acquire a Personal Tax Identification Number (PTIN).
With that, you then have 2 options for officially becoming an EA: taking the EA exam or using your IRS experience. Specifically, you can either take a 3-part exam (officially known as the Special Enrollment Exam or SEE) or show relevant work experience with the IRS.
The IRS hasn’t set any prerequisites for taking the EA exam (e.g., education or experience). However, passing the exam is easier if you do have previous tax experience.
While the IRS administers the EA program, no central administrative body manages the CPA program. Instead, each U.S. state or jurisdiction has an accounting board that oversees its specific CPA requirements.
In general, these requirements are similar across boards. For example, most state boards require candidates to have 150 credit hours (equivalent to a bachelor’s and master’s degree) of education. Some boards also mandate that your degree or degrees be in a field that is relevant to the CPA.
The EA exam includes 3 parts:
Each EA exam part consists solely of multiple-choice questions. And therefore, this exam format allows you to receive your results immediately after you take the test. A passing EA exam score is 105 on a scale of 40-130.
Most candidates say that Part 1 and Part 3 of the EA exam are the easiest parts to pass. In fact, some candidates with tax experience report that they can pass these parts without much studying. But nearly everyone has to work hard to pass Part 2.
So, naturally, Part 2 has a reputation for being the hardest section of the EA exam. And the EA exam pass rates validate this understanding of the exam parts, as Part 2 has the lowest pass rates of them all.
However, the IRS allows candidates to take the EA exam in any order. Therefore, you can save Part 2 for last. But, you must pass all 3 parts within a 2-year period.
The content of the CPA Exam is much broader than that of the EA exam. Therefore, the CPA Exam has 4 sections:
The CPA Exam sections consist of a series of testlets presenting different types of questions. So, the CPA Exam question types are:
And the number of questions each CPA Exam section contains varies. However, the total testing time for each exam section is 4 hours.
The REG part of the CPA Exam is most equivalent to the content you’ll find in the EA exam. Yet, just about 70% of the REG content directly relates to the EA exam. The remaining questions cover other topics like business law.
But the taxation section of REG is highly comparable to the EA exam. In fact, the overlap can help candidates pass both exams in a timely manner.
So, if you start with the CPA Exam and struggle with REG, you can temporarily change course by sitting for the EA exam, passing it, and earning your EA title. Then, you can apply what you learned from the EA exam to the REG section of the CPA Exam. And ultimately, you can also earn the CPA license.
The IRS has defined a specific time frame during which you can take the EA exam parts. This EA exam testing window lasts from May 1 to February 28 of the following year.
So, essentially, March and April are the only months during which you can’t sit for the EA exam. These months are off-limits for scheduling because the IRS uses them to make exam updates.
However, you can take the EA exam at any other time of the year with as much time between each part as you like.
If you fail any part of the EA exam, you can re-take it. But if you fail the same exam part 4 times in 1 testing window, you have to wait until the next testing window to take that exam part a fifth time.
You’ll find less flexibility in the CPA Exam schedule. This exam is only available during 4 annual testing windows. The CPA Exam testing windows are:
Like the EA exam, you can take the CPA Exam in any order. And you also have limits on how long you have to take and pass the CPA Exam. Specifically, you must pass all 4 sections of the CPA Exam within a rolling 18-month period. This time period starts as soon as you pass your first exam section. Then, you have 18 months to pass the remaining 3 sections.
If the original 18-month deadline runs out on you, you’ll lose credit for the first exam part you passed. Then, you will have to re-take that section and continue to take and pass any remaining sections within 18 months of when you passed the second part of the CPA Exam.
As you can see, you only have a certain amount of time to pass the EA and CPA exams. With just 2 years to pass the EA exam and 18 months to pass the CPA Exam, you’d benefit from passing each part on your first try so you can finish each part within the time limit.
And even though these exams are quite challenging, passing each part on the first try is definitely possible when you invest in a review course.
Thankfully, no matter which certification you choose to pursue, you can rely on either an EA review course EA review course or a CPA review course to help you achieve exam success. To find the best course for you, learn more about your review course options or contact me.
Once you pass the EA exam, you only need to take a few more steps to receive the designation. Specifically, you must complete and submit Form 23 to the IRS. From there, the IRS will process your application and conduct a suitability check. In all, this final step takes about 60 days.
If you’re using your prior IRS experience to become an EA, the process takes a bit longer. In this case, the IRS needs 90-120 days to review your application for enrollment and conduct your background check.
On the other hand, the remaining requirements for the CPA Exam are a bit more intensive. In most cases, state boards mandate that you acquire 1-2 years of accounting experience. And, you may need to have another CPA supervise and sign off on this experience. Finally, you may also need to pass the state’s ethics exam.
You must pay to take each part of the EA exam. And the latest EA exam fee is 184.97 per part. So, in all, you’ll pay $554.91.
As mentioned, you should also buy an EA review course. Again, this type of course will help you successfully prepare for the exam so that you can pass on the first try. And as a reference for your budget, the most popular EA course, Gleim EA Review, is $530-$630 depending on your course package.
Finally, once you pass the EA exam and are ready to submit your application, you’ll have to pay the IRS $30 to complete the enrollment process.
In your budgeting process, I suggest accounting for additional enrolled agent exam costs. These costs can include exam retakes, the fee to reschedule a testing appointment, and continuing education courses.
The CPA Exam is slightly more expensive than the EA exam. However, the CPA Exam does include an additional section. Usually, you pay $208.40 for each of the 4 CPA Exam parts, which comes to $833.60 in total.
Additionally, you’ll pay a fee when you apply to the CPA program. This fee varies based on the state and ranges from $30 to $200.
Similarly, you need to account for the cost of a CPA review course, which is extremely vital to the CPA exam process. And unfortunately, a CPA review course is also more expensive, costing about $1,700 on average.
Then, after you pass the CPA Exam, you’ll probably have to pay for the ethics exam, which typically costs $130. And finally, you’ll pay your CPA licensing fees for around $150.
And as with the EA exam, you should factor in a few other miscellaneous CPA Exam fees as well.
This chart shows the overall costs of earning the EA and CPA titles.
|Testing Fee (per part)||$184.97||Examination Fee (per part)||$208.40|
|EA Review Course||$500||Application Fee||$100|
|Enrollment for Practice:||$30||CPA Review Course||$1,700|
The CPA Exam is expensive, so you only want to pay for it once. Therefore, you really must invest in a review course. In most cases, candidates pick Surgent CPA Review, Becker CPA Review, Gleim CPA Review, Wiley CPAexcel, Roger CPA Review, or Yaeger CPA Review. Fortunately, you can use CPA review course discounts to save on the cost of these courses.
Generally, CPA salaries also increase more with time. But EAs do have an opportunity to significantly boost their salaries during tax season. For example, one of my readers earns more during tax season than he typically earns in a year working in retail.
For employment, EAs typically don’t work for tax or accounting firms. Instead, they often have their own clients. Consequently, they can work from home with greater flexibility.
Conversely, CPAs tend to start off working for accounting or auditing firms, but as they gain experience, they too launch their own practices.
Both EAs and CPAs provide essential services to clients. Yet, the value they add to the public differs, as you can see from these lists.
As an EA, you focus on tax and tax only. However, you can specialize in an area like tax preparation or tax resolution. That being said, CPAs who also specialize in tax should think about earning the EA title to further demonstrate their expertise.
The IRS grants EAs unlimited representation rights on a federal scale. Therefore, EAs can work with clients in any U.S. state.
EAs can offer similar services as tax attorneys. For example, they can represent clients in civil resolution cases. What’s more, they can supply these services at a lower cost.
If you remember, the EA exam includes 3 parts, whereas the CPA Exam features 4 sections.
Furthermore, the questions in the REG CPA Exam section aren’t as in-depth as the tax questions in the EA exam. However, the CPA Exam questions are harder because it presents written communications and task-based simulations.
Comparatively, the EA exam questions are more detailed but contain less variety and complexity. Therefore, they are easier.
Because of this, most EA candidates take and pass the exam within a few months. In contrast, most CPA candidates take 12 to 18 months to pass their exams.
So, you’ll spend less time earning the EA title and can, therefore, start working with clients much sooner.
CPAs are experts in accounting and auditing, but most titleholders also offer tax filing services. Their depth of skills makes them attractive to small businesses that need a range of services from one team.
CPAs know the numbers, so hiring a CPA makes sense for businesses who need trusted advisors to provide them with better and more accurate tax planning.
EAs are not as well-known as CPAs. But they are as good, if not better, at serving clients with income tax issues. Plus, the CPA license generally has a much higher barrier of entry than the EA credential.
So, if you’re thinking about a career in income tax and want the flexibility of choosing your own schedule, you should further explore the benefits of the EA title.
However, if you want to focus on accounting issues beyond tax, the CPA may be the best choice for you. While the CPA requirements are more complex than the EA requirements, you’ll likely earn more as a CPA. And, you’ll have a widely-known title that can take you to new career opportunities.
So, if the CPA appeals to you, then sign up for my free CPA course to learn more about the process of earning the CPA.
I am the author of How to Pass The CPA Exam (published by Wiley) and the publisher of this and several accounting professional exam prep sites
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