General Question

2davidc8's avatar

When it comes to preparing your tax return, what can a CPA do better than an enrolled agent, generally speaking?

Asked by 2davidc8 (4771 points ) January 25th, 2012

Are there certain areas like partnership flow-through income, K-1’s, rental property, IRA rollovers, depreciation, estate taxes, foreign taxes, etc., that are best left to a CPA? What can an enrolled agent NOT handle, and why not?

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6 Answers

zenvelo's avatar

The EA will know what the tax treatment is for a certain type of income, and may know alternative ways to structure the timing of the income for best tax advantage. The CPA may help structuring the income itself for the most favorable tax treatment. And if you’re running a business you definitely need a CPA to help structure both the business’ taxes and your personal taxes.

Adirondackwannabe's avatar

Don’t look at the titles. Look at the person doing the work.

john65pennington's avatar

I think the difference would be past experience and knowledge of the new and old tax changes.

jca's avatar

My stepfather is a CPA and he had a couple come to him that had gotten audited by the IRS. They had been getting large returns from a “storefront” tax preparer in the Bronx. This guy had gotten very successful, from word spreading that he could get people big returns. However, he was taking deductions for things that were not legit. The IRS apparently does not usualy audit individuals, but they audited, based upon the preparer’s ID #, everyone who had him prepare their returns. This couple owed thousands of dollars now in back taxes, plus fees and interest. My stepfather the CPA prepared their returns for the IRS and his came out within about 15 cents to what the IRS was saying they owed. A CPA would also go with the individual or corporation to an audit, and stand behind his work.

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