As the options for tax debt settlement have been diversified, different types of professionals can also be hired by taxpayers to address their concerns. However, the most well-known of these professionals are also those who have been in the business for decades: certified public accountants and enrolled agents. Below are the key differences between these two professionals:
Certified Public Accountants. CPAs are licensed by state boards of accountancy to deal with financial investments, accounting, planning, and tax preparations. CPAs have expertise in bookkeeping and recording income and tax returns as well as attesting an audit of one’s business deductions, income, and expenses.
However, not all CPAs specialize in taxation and some of them specialize in more than one service, so they are not always focused on tax preparations, for example. Being licensed only by the state where they took the board exam, CPAs are also not mandated to handle out-of-state returns. They can also only accommodate a limited number of tax cases within a specific period.
Enrolled Agents. Enrolled agents are specialists in federal tax planning, individual and business tax return preparations, and representation during an IRS audit meeting. EAs give pieces of advise and prepare comprehensive tax returns for individuals, business establishments, corporations, estates and other entities.
EAs can help taxpayers who have out-of-state returns, since they are granted by the federal government unlimited right to practice. They can also be hired in place of taxation attorneys to resolve IRS disputes. The latter professionals are known to command higher rates.
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