Accredited Tax Preparer (ATP) vs Enrolled Agent (EA)
Why Earn Your ATP
The Accredited Tax Preparer (ATP) and Enrolled Agent (EA) designations are both valuable for professionals in the tax preparation field, but they have a key differences in terms of scope, authority, and career implications.
Many of our ATP’s earn the designation as a milestone while pursuing the EA exam. Many also maintain both designations to demonstrate their expertise as tax professionals and to further distinguish themselves from EA’s as the CPE requirements for ATP’s encourage other fields of study outside of federal taxation.
Scope & Purpose
The Accredited Tax Preparer (ATP) exam is administered by the Accreditation Council for Accountancy and Taxation while the Enrolled Agent exam is administered by the Internal Revenue Service.
The ATP exam covers individual tax returns (Form 1040), tax credits, deductions, and other tax compliance issues.
It certifies a professional’s knowledge in basic tax preparation and planning, making it ideal for those focusing on individual tax preparation services. The ATP exam is most similar to Part 1 of the EA exam.
EAs are licensed to represent taxpayers before the IRS for all tax matters, including audits, collections, and appeals.
The EA designation includes two additional exam subject matters, one more akin to our Accredited Tax Advisor designation and the other on taxpayer representation which is unique to the Enrolled Agent.
History
The Accredited Tax Preparer has been managed by ACAT since 2001. The EA designation was coined in 1966 for individuals who passed the IRS’s Special Enrollment Examination.
Representation Rights
Accredited Tax Preparers have limited representation rights before the IRS. They can represent clients whose returns they have prepared and signed, but only before revenue agents, customer service representatives, and other similar employees of the IRS, including the Taxpayer Advocate.
EA’s representation is unlimited and therefore extends to any taxpayer. They can represent taxpayers before appeals officers, revenue officers, attorneys from the Office of Chief Counsel.
Ongoing Costs
The Accredited Tax Preparer exam is $250, while the Special Enrollment Examination for the EA is $259 per section or $777 total. The renewal fee for the ATP is $150 per year and other than reviewing your information and attesting to meeting the requirements, the renewal process can be completed in under 10 minutes. The renewal fee for the EA costs $140 every three years and requires completion of a three page form.
Exam Content
The Accredited Tax Preparer exam features one hundred (100) multiple choice questions and focuses primarily on individual tax preparation, including understanding tax deductions, credits, and how to prepare individual tax returns. The content of the ATP exam is narrower than that of the EA exam and is more tailored to professionals who prepare basic tax returns for individuals and small businesses.
The EA exam consists of three parts, each 100 questions, and features individual taxation (similar to the ATP), business taxation (similar to the ATA), and representation matters. This makes the EA exam well suited for those focusing on more advanced topics such as representing clients in disputes with the IRS. Each section of the exam has a separate fee for each section, while the ATP is a single exam.
Recognition
Those achieving the Accredited Tax Preparer designation and satisfying the renewal requirements, including earning continuing professional education, are exempt from the IRS Annual Filing Season Exam. This is unique to ACAT.
While the Enrolled Agent is widely recognized in the tax industry as it is administered by the IRS, it is also considered a gold standard for those wanting to specialize in tax representation and practice at a higher level. Many of our ATP’s have gone on to earn their EA and maintain both designation to distingush and stand other from other EA’s.
Application
Applying to sit for the Accredited Tax Preparer exam is a quick four-step application process that requires you to attest to meeting the relevant requirements.
Those pursuing the Enrolled Agent exam are limited to restrictive testing windows administered by a third party. Upon passing, you must also pass a suitability check which includes ensuring all tax returns have been filed and tax liabilities paid, and a criminal background check.