When faced with a tax issue, you want to make sure you select the right tax professional to resolve your problem. It’s just like choosing any other professional (i.e. mechanic, dentist, and electrician), you want to make sure that the person is competent and charges a reasonable rate. There are several different types of tax professionals. The main three are CPAs (certified public accountants), enrolled agents, and tax attorneys. So, the natural question becomes, what is the difference between the three?
A certified public accountant (CPA) is an accountant who has passed the CPA exam; and depending upon the state, has satisfied the applicable work experience requirement. Don’t take this lightly; passing the CPA exam is no easy feat. Thus, CPAs are very capable and knowledgeable individuals. However, not all CPAs specialize in tax. The CPA who performs tax work usually does so only for about 3 to 4 months of the year. Additionally, most CPAs are not trained to represent clients before the IRS. Please exercise caution if you are considering hiring a CPA for tax debt settlement.
An enrolled agent is a person who is licensed to represent taxpayers before the IRS. To become an enrolled agent, a person must either pass an exam or worked as an IRS employee. Becoming an enrolled agent requires less education and certification than CPAs and tax attorneys. They are not required to have a college degree or any other tax related education. However, enrolled agents typically charge less than attorneys and accountants for their services.
Please do not misunderstand, I am not saying do not choose an enrolled agent. Enrolled agents are also knowledgeable and capable tax professionals. I am saying make your decision based on what is best for your situation. If you are facing a very complex tax issue, then you may want to choose a CPA or tax attorney.
Tax Attorneys are lawyers who specialize in tax law. In addition to passing the bar exam, the very best tax attorneys have a Masters of Law in Taxation (the highest educational degree available for tax law). Tax attorneys are uniquely qualified with knowledge of the tax law, as well as training on representing clients in adversarial proceedings. But, there are many different
types of tax attorneys. When choosing a tax attorney, it is important that you choose a tax attorney that specializes in tax controversy (representing clients before the IRS).
As I already stated, make sure you choose the tax professional that is best for your situation. If you need a tax return prepared, then a CPA or accountant is your best choice. If you have a small debt with the IRS that you do not dispute, then an enrolled agent may do trick. But, if you have a dispute with the IRS that involves a highly complex tax issue, then you may need to contact a tax attorney.
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