Understanding the Capacities of Different Tax Practitioners
As a small business owner, you might be wondering…
What is the difference between tax practitioners and which one should I use?
Determining the nuances of qualified individuals providing tax preparation and representation involves understanding the scope of expertise various tax practitioners possess. Here is an in-depth comparison to help you discern the capabilities of different professionals in the field.
Unenrolled Tax Practitioners
Non-Credentialed Tax Practitioners: These individuals assist in basic tax preparation, offering guidance on filling out tax forms and providing general tax advice. However, they usually do not have the authorization to represent clients before the IRS in most situations.
Annual Filing Season Program (AFSP) Holders: AFSP holders have completed an annual tax refresher course and possess a higher level of understanding in tax matters. They can represent clients in limited situations before the IRS, usually pertaining to the returns they prepared and signed.
Enrolled Tax Practitioners
Enrolled tax practitioners hold recognized credentials like Enrolled Agent (EA), Certified Public Accountant (CPA), or tax attorney. They possess the authority to represent clients before the IRS in a broader capacity, including during audits, appeals, and collections.
Enrolled Agents (EA): EAs specialize in taxation and have unlimited practice rights. They can represent clients before all administrative levels of the IRS, making them well-equipped to handle various tax-related matters.
Certified Public Accountants (CPA): CPAs can offer a comprehensive range of financial services beyond taxation. They have the authority to represent clients before the IRS and some firms provide accounting, financial planning, and/or tax advisory services. Many CPAs will choose to specialize in one specific area.
Tax Attorneys: With specialized legal expertise in tax law, tax attorneys offer comprehensive legal representation and advice regarding tax matters. They can represent clients in court for tax-related issues, offering a unique blend of legal and tax-specific knowledge.
Each practitioner brings a distinct set of skills and authorizations to the table. When selecting a tax professional, consider the complexity of your tax situation and the specific expertise required.
Enrolled tax practitioners, including EAs, CPAs, and tax attorneys, often possess more comprehensive abilities to handle complex tax scenarios, including legal representation before the IRS and in court.
On the other hand, non-credentialed and AFSP holders offer valuable services for simpler tax needs, providing guidance in basic tax preparation and general tax advice.
Remember, the specific abilities and scope of practice may differ among individuals within each category, influenced by their additional certifications, experience, and state regulations.
Choosing the right tax practitioner ensures you receive tailored expertise that aligns with your specific tax needs, whether it is tax preparation, financial advice, or legal representation in intricate tax matters.
