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CPA becoming an EA

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#1
philly  
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Are there any CPAs in the group who are also EAs. I was thinking about taking the EA exam.
 

#2
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I'm just an EA but I can provide input that, especially for a CPA, the exam is "relatively easy".

I suggest the Gleam test guide. Put some time in studying until you have an acceptable practice score in each area and you'll be good! Plus it will be a great review.

The hardest part for me was the partnership basis computation questions (and computation questions containing things like "boot", etc). But I mostly came from a corner H&R Block store job so I had little exposure to these concepts going into the exam. I worked for a CPA for 2 years too but those things didn't come up often.
 

#3
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What is the advantage to a CPA obtaining EA certification, other than being able to add more letters behind their name?
 

#4
philly  
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The license of an EA is authorized by the federal government, i.e., the Internal Revenue Service (IRS), giving them nationwide authority. The CPA license is issued by any of the 50 U.S. states, restricting a CPA’s authority to the state level.
 

#5
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What is "nationwide authority" and what advantage does that give?
 

#6
CathysTaxes  
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If an EA moves out of state, he can still operate as an EA, the CPA would have to obtain a new license.
Cathy
CathysTaxes
 

#7
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In theory the 50 state thing is nice, but in the practical sense it's very unlikely a CPA would not be allowed to represent their client in any state. I've never had some question a POA in any state, and the POA only says CPA due to limitations with my software/can only check one box.

The EA exam, like any exam, will teach you a ton in the study process. I had 10+ years experience at the time and I still learned a lot (although most is "book answers" vs real world answers if you know what I mean. Besides the education and letters behind your name (and hopefully higher billing rate) the EA is useless to a CPA.

I only did the EA because I was not eligible for the CPA exam at the time.

I spent about 150-200 hours on the three parts, about 12-15 hours a week, starting October 16th of 2 consecutive years.
Did part 1 by Xmas and part 3 by Jan 31st before tax season kicked off. Took part 2 by Xmas the following year.
I think it was roughly 70 hours part 1, 80 part 2, and 40-60ish for part 3, I have the logs somewhere. I did the full Gleim method which was time consuming. If I did it again I would trim certain areas of study to accelerate the course. I was overprepared.

I spend 550 hours over 5.5 months for the CPA exams with 92 avg score to put it in perspective.
 

#8
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Most states offer reciprocity and it's relatively easy to get licensed as a CPA in a new state if you're already licensed in one state. Of course, this is going to vary a little depending on the two states. I would think most dual CPA / EA practitioners would get licensed in the new state if they moved. There may not be a need to, but I doubt they can hold themselves out as CPAs in the new state unless they're licensed by that state. Certainly, it would be foolish to let CPA licensure lapse.

I was really just curious if an EA designation would provide advantages above and beyond what a CPA license provides.
 

#9
smtcpa  
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I don't think this is true.

"A majority of states have adopted mobility legislation - which is a practice privilege that generally permits a licensed CPA in good standing from a substantially equivalent state of practice outside of his or her principle place of business without obtaining another license. " https://cpamobility.nasba.org/

CathysTaxes wrote:If an EA moves out of state, he can still operate as an EA, the CPA would have to obtain a new license.
 

#10
smtcpa  
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I agree. Other than filling in some knowledge gaps (which is more effectively done with CPE), I don't see any advantage. From a marketing standpoint, the CPA letters are far more recognizable. I don't know why you would spend time on that rather than growing your business.

ManVsTax wrote:What is the advantage to a CPA obtaining EA certification, other than being able to add more letters behind their name?
 

#11
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If you have a state CPA Board that prefers being important over actually protecting the public and which seems to actively enjoy taking licenses away from sole practitioners, the EA designation may offer a bolt-hole. You’d still have to report it every three years at renewal time, but it is not necessarily fatal to renewal. So, yes, I see value in a CPA becoming an EA.

In case anyone is wondering, I saw a good man destroyed by a pompous, overbearing board that did not care about the person or his family and believed, without critical inquiry, everything a bitter client told them.
 

#12
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It used to be that having a CPA certification was better than the EA certification. This is because it used to be that you offered your services to people in a 30 mile radius of your office and therefore only provided services in one state.

However, the EA allows taxation services in all 50 states.

With the rise of remote technology, many CPAs are now preparing tax returns for many different states.The problem is, CPA mobility differs from state to state, and differs depending on type of service offered, etc. It can be easy to be in non-compliance and not know it using CPA mobility. That’s why people only providing tax services now want the EA designation (in addition to the CPA designation), because frankly the CPA mobility rules are a pain to research and comply with. Even using the mobility tool, it’s just a time consuming headache.

It’s also why you can’t call your firm Jane Doe, CPA. Because each state has to be registered in if you want to use that CPA designation (which is state issued) if are going to physically practice there. It’s better to just say Tax Services and be an EA. Also’s it’s less expensive and requires less CPE.
 

#13
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Here’s another common misunderstanding: the use of the phrase working remote.

Most people mean they have an office and then a home about an hour away, and they are working at home.

But some people mean this week I am physically in New York, the next week in CA, the next week in England, etc because they work remotely. When you start working physically in more than one state, the mobility rules get more complicated. The local CPAs start calling boards up and reporting you (not me personally, I’ve seen griping on both Texas and Florida forums).

Using the EA designation removes these huge headaches.
 

#14
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Sumwun, that's a good point, but I'd view that more as a backup plan than privileges conveyed above and beyond. A very good backup plan, don't get me wrong.

Treetop, CPA mobility is more of an issue for audit CPAs. As this is a tax forum, nearly all CPAs on here are tax CPAs. I am licensed as a CPA in my home state. I have clients physically located outside of my home state. I provide services (remotely) to them and hold myself out as a CPA licensed in my home state. I'm not aware of any state that would require me to also be licensed in that state by mere virtue of providing remote services. Are you?

I can see the point you're driving at, and will give you that it's a niche above and beyond. Not compelling to me, but I'm just one person.
 

#15
Beagle  
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In my state you will all (except 1 state I think) get reciprocity but you are expected to pay a 1x fee of $90 and join the CPA organization (to prove that you are maintaining your certification properly and learning our state tax laws) and that is $399 per year.

The EA is <$50 per year.

Your state rule doesn't impact my state. If you live in Florida and have clients in my state, you are required by my state to get your reciprocity if you hold yourself out as a CPA. (there might be a number of client limit but I've never seen that). FINRA securities license is a national license but if you have a client in a state, you must pay a license fee to that state.
 

#16
juro  
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ItDepends wrote:
I suggest the Gleam test guide. Put some time in studying until you have an acceptable practice score in each area and you'll be good! Plus it will be a great review.



did u buy this?
Gleim Premium EA Review System
https://www.gleim.com/enrolled-agent-review/courses/
 

#17
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I used the complete Gleim program.


I am also not aware that I would have to register in CA, or CT or NJ for example if I have a tax client there that I service from my home state in NY.
I've never come across these rules, but would love to use them to fire out of state clients. Have source links?
 

#18
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I am a CPA not an EA but am curious if someone would become an EA and practice as an EA to avoid personal liability. I don't know what the laws are in my state, nor any state for that matter, but personal liability may end at the entity level if the EA operates as LLC, Inc., Ltd., or Corp., whereas the CPA is personally liable for his/her own work regardless of entity type.

I know of several CPAs who operate a tax practice under a corporate umbrella such as ABC Advisors, Inc. I've always assumed they did it to avoid personal liability but never looked into it beyond that. My guess is that an EA may not be personally liable for their own acts and, if true, an LLC or corporate arrangement would provide him/her with personal protection. That would be determined by each person's state laws.

Does anyone know whether this is true in your state?
 

#19
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My understanding in my state is the entity only protects you if you have employees, not for your own work. You can still be found negligent and responsible if you don't properly oversee their work as well.

I see no reason an ea would receive any special treatment.

in Ny only cpas can have equity in a firm that has a cpa title in the name, so some firms use tax and advisory names to allow noncpa star employees equity.

#notanattorney, but i had this discussion with my attorney
 

#20
philly  
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Would an MS in Taxation be a good credential for a CPA?
 

#21
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If it's from a decent college it can't hurt. In most cases, I think the education would be more valuable than the piece of paper.
 

#22
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Taxalmancer wrote:I am a CPA not an EA but am curious if someone would become an EA and practice as an EA to avoid personal liability. I don't know what the laws are in my state, nor any state for that matter, but personal liability may end at the entity level if the EA operates as LLC, Inc., Ltd., or Corp., whereas the CPA is personally liable for his/her own work regardless of entity type.


I'm unaware of any certification or entity structure that would shield a practitioner from personal liability from their owns torts or gross negligence.
 

#23
sjrcpa  
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philly wrote:Would an MS in Taxation be a good credential for a CPA?

Yes if you are a tax practitioner.

SumwunLost wrote:If it's from a decent college it can't hurt. In most cases, I think the education would be more valuable than the piece of paper.
I agree. Disclosure - I have an MST.
 

#24
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Just to reiterate- it’s not having clients in different states that causes problems. It is when you, the CPA, are physically practicing in different states. That is what causes problems. Even when I explained it, it seemed like people didn’t get it. I physically get on an airplane and fly to different states. That is what causes mobility problems. The states all basically say you can’t call yourself a CPA unless you register in that state. So to avoid hassle with local CPAs, which can be caused by having CPA be part of your firm name, it’s easier to use EA designation.
 

#25
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A better credential is to have an LLM in Taxation. A law degree + CPA license will take you as far as you want to go.
 

#26
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ManVsTax wrote:What is the advantage to a CPA obtaining EA certification, other than being able to add more letters behind their name?


I agree with this.... many EA's I know struggle to explain what it is etc. Early in my career I got an MS in tax to help differentiate me. Did it help? I think it did BUT maybe just psychologically.

My assistant wants to open her own practice and is taking the CPA exam after being an EA for almost 10 years.

She's tired of explaining what it is.

I fully respect EA's and wish somehow there was more awareness.

However, I think that "self confidence" is most important.

I know an EA that if I ever got in trouble, I'd have him represent me. Not a CPA.

I think he is that good.
 


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