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Accountants: learned something new recently

EasyMoney_in_NC

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I was chatting with a friend of mine (much older gent than I) recently, we were talking about who I used for my tax prep. He informed ME that my accountant was an Enrolled Agent. "A what?" I said, he proceeded to explain to me what I was dealing with. I must admit I hadn't heard the term before, but found out its a good thing, to be using an E.A. for tax prep as apposed to "CPA".

For those who don't know, an E.A. is a licensed individual capable of representing a client in the event of an audit. A CPA is not capable of going before the IRS unless they are also an E.A.. I (as well as many I would guess) use the generic term CPA when talking about taxes etc.....but never thought about the issue of audit counsel.

Am I the only one who has been in the dark? Either way, I feel better now, knowing :)
 
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Diane Kennedy

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Nope. You've gotten bad advice. A CPA and attorney are the only ones allowed to practice before the IRS. An EA can do it as well, in certain circumstances. CPAs and attorneys don't have the same restrictions.
 

Diane Kennedy

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I should also add that there is no confidentiality with an EA for records. In other words, anything you tell them or they put in their workpapers can be be subpoenaed in case of lawsuit.

In some states (Arizona for example) CPAs have the same client privilege that attorneys do. In all the rest of the states, an attorney can put a CPA under their umbrella of privilege. I have done that exact thing when a client of mine in NV was sued. NV doesn't have the client privilege, but I went under an attorney's umbrella and they couldn't subpoeana my records.

Anyone else would have had to surrender the records.
 

EasyMoney_in_NC

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http://www.naea.org/memberportal/Resources/ForTaxpayers/Whatis_EA.htm

what am I missing from this Dianne? Am I reading this wrong? I see the limited aspect of client privilege, but does offer it under an audit, not the prep of the forms.

And what are you saying as it pertains to EA's vs. CPA's? Could I be better off with a different designation from my preparer?

As a side note, I have always noticed that he is more "tight lipped" when it comes to any ................shall we say, creativity :) He will abide by the rules, not give any creative advice, but does entertain "loop holes" brought to his attention. He will research before acting and does act in my favor if I've brought something valid to his attention. Of course it goes without saying, everything we do is above board, but he does tend to need a "push" to venture outside the "norm"...............does his EA designation cause this?
 

Diane Kennedy

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The other thing that's true for CPAs, tax attorneys, EAs and anyone else involved in tax preparation this time of year is that we're very busy. In fact, if you find one who isn't busy, that tells you they really aren't involved in taxes.

So, that said, I don't have the time to get involved in a debate.
 

EasyMoney_in_NC

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Yeah, I'm beginning to wonder if I should be moving on. I've threatened to for years and just don't do it because my current guy has my entire history in him hands and it just seems like it would be so hard to establish with someone else. But it does seem as if an EA is more of a ward of the government than a CPA. I don't really want someone working for them, I want them working for me and my best interests (not to say my guy doesn't have our interest in mind, but could look out more for my wants/needs). Hmmm, glad I brought this up.
 
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kurtyordy

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The other thing that's true for CPAs, tax attorneys, EAs and anyone else involved in tax preparation this time of year is that we're very busy. In fact, if you find one who isn't busy, that tells you they really aren't involved in taxes.

So, that said, I don't have the time to get involved in a debate.

I was surprised to see posts by you at this point in the calender.
 

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