Enrolled Agents – The Liechtenstein of the Tax World

I sometimes joke that, in the tax world, when it comes to name recognition, CPAs are like the United States and enrolled agents are like Liechtenstein.

Lichtenstein, kindred spirit of enrolled agents.
(Image courtesy of Wikipedia)

Based on IRS stats on who has been issued preparer tax identification numbers, there are actually more enrolled agents (42,895) than attorneys (31,189) in the tax world. But CPAs (212,975) outnumber us all.

In terms of name recognition, EAs are far, far behind. We may outnumber attorneys but that doesn’t mean our name recognition is better than that of attorneys, and we are light years behind CPAs.

When people hear “CPA” they think “tax expert.”

When people hear “enrolled agent,” they think either “what the hell is that?” or “he must work for the IRS, flee for your lives!”

As much as it pains me to write that, it’s a fact.

(For further reading, see my last article on this topic: “Why Are Enrolled Agents So Crabby?”)

RTRPs Poised for an Overthrow of CPAs?

Earlier this week, the AICPA published this article in which the author wrings her hands over the potential number of “registered tax return preparers” out there — potentially more than 340,000, though only about 4,900 have actually passed the exam so far — and how this could adversely impact CPAs. Bruce McFarland posted a response to the AICPA article, titled “Why Was My Voice Not Heard By the AICPA?”, in which Bruce rightfully takes the AICPA to task for assuming that CPA automatically equals “tax expert.”

So will RTRPs overtake CPAs as the “United States” of the tax world? It could happen, though I still think the CPA brand name is golden.

And it’s not like these 340,000 potential RTRPs are newcomers to the field. Most of them have probably been in business for years — in competition with CPAs, attorneys and EAs — and operating as “tax preparers.” Now they get to tack the word “registered” onto their name.

Will that really be some sort of death blow to CPAs? I doubt it.

But because “registered tax preparer” is a lot more publicly palatable title than something with the word “agent” in it, it could push EAs further into obscurity, which is scary.

After all, what’s more obscure than Liechtenstein? Burkina Faso? Myanmar?

(Okay, according to this website, a country called Nauru, an island nation in the Pacific Ocean, is the most obscure country in the world. Liechtenstein is #15 on the list. Burkina Faso is #14. Myanmar is not on the list. And now you know.)

“This blog post, along with comments that may follow, should not be considered tax advice. Before you make final tax or financial decisions, please secure a professional tax advisor to give you advice about your unique situation. To secure Jason as your accountant, please click on the ‘Services’ link at the top of the page.”

13 Responses to “Enrolled Agents – The Liechtenstein of the Tax World”

  1. Robert D Flach July 27, 2012 at 8:01 am #

    JD-

    You are correct in your concerns about the perception of the Enrolled Agent.

    I do believe that EAs were recently given the chance to suggest an alternative designation to replace “EA”, but chose to keep the EA. I have suggested that it be changed to “Enrolled Tax Return Preparer” (ETRP) to be more like the RTRP.

    Many EAs are actually sitting for the initial competency exam to be able to receive the RTRP designation, in addition to their EA, for purposes of public acceptance.

    FYI, I will be posting my comments on the AICPA post at THE WANDERING TAX PRO on Monday.

    TWTP

    • Jason Dinesen July 27, 2012 at 8:04 am #

      You are right – the national association did take a survey of members to see about changing the EA name but ultimately it was decided to keep it as EA.

      I look forward to reading your thoughts on Monday!

    • Diane Herman, E.A. January 10, 2013 at 6:30 pm #

      I have been an EA since 1989 and people still do not know what it is…I have had to educate clients. I did go ahead to take the RTRP test last month just to add more initials and I know clients will know what that refers to.
      It was much easier than the EA test.

      • Jason Dinesen January 11, 2013 at 5:34 am #

        Diane,

        Your comments about the RTRP exam confirmed what I figured regarding how difficult (or not difficult) it is.

        I’ve thought about taking the RTRP exam but am refusing to just on the whole principal of the thing.

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