Why Use a CPA?
The CPA is the premier qualification in the accountancy field.
Becoming a CPA requires years of education, exams and experience, and many drop out of the process. According to the AICPA only about 45% pass the exam.
Of all tax preparers CPAs have the greatest amount of relevant education and are required to do much more continuing education on an ongoing basis. CPAs are relied upon because of their keen analytical and decision-making skills. Their clients also value their objectivity, integrity and dedication to service.
CPAs typically specialize in a particular field, for example taxation, but are trained in a variety of areas, allowing the CPA to provide guidance to clients on a broad range of topics.
- CPAs are tested and certified.
- CPAs have a college degree. Eligible candidates must graduate with an appropriate baccalaureate or master’s degree from an accredited college with a focus on accounting or finance.
- CPAs must meet certain work experience requirements in public accounting, corporate accounting or finance, or in academia to receive a CPA certificate.
- CPAs take continuing education. Active CPAs continually meet continuing education requirements in order maintain an active CPA certificate.
- CPAs follow a strict code of ethics. In addition to education and licensing requirements, members are bound by a strict code of professional ethics and are required to take ethics courses.
Tax law is very complex with many volumes of tax code books. No one has the time to read all those books, not to mention staying up with the current and new laws, which is what the CPA does for you.
Recently, a new law was introduced requiring that paid preparers now must register and pass a competency test to get a license to prepare income tax returns. CPAs, enrolled agents and attorneys have been exempted from the testing requirement. See https://www.irs.gov/tax-professionals/understanding-tax-return-preparer-credentials-and-qualifications
Enrolled agents tend to be either former IRS employees or other tax practitioners. For the latter, the requirements to become an enrolled agent are:
- Pass a written exam.
- Pass a background check
- Apply for enrolment
CPAs, enrolled agents and attorneys can all represent you before the IRS, but only attorneys can represent you in court. Tax attorneys are experienced in both tax and law. Let’s face it – you should only pay high attorney fees when you are in serious conflict with the IRS and resolution can only be found in a court of law.