What is the
Difference
Between a
CPA and Tax
Accountant?
Qualifications & Licensing
A Certified Public Accountant or CPA holds a
license issued by the state. Acquiring this
license requires an individual to acquire
rigorous education, pass certain exams, and
develop their skills for as long as they work.
Tax accountants may receive formal training
but do not need certification to operate.
Scope of Work
CPAs and tax accountants perform overlapping
duties. CPAs, however, have a broader scope.
Tax accountants mostly handle tax return
preparation, planning, and compliance. CPAs
offer audit services, financial consulting,
forensic accounting, and regulatory
compliance, along with everything tax
accountants do.
Legal Authority
One significant difference between a CPA and
tax accountant services in Santa Monica is legal
authority. CPAs are licensed to provide audited
financial statements, making them essential for
businesses needing compliance with
regulatory agencies, investors, or lenders.
Despite being knowledgeable in tax laws,
accountants cannot sign audited reports or
provide attest services.
IRS Representation
When dealing with the IRS, not all providers of
tax accountant services in Santa Monica have
the same level of authority. CPAs can represent
clients in IRS audits, appeals, and collections,
similar to tax lawyers and enrolled agents.
Which One Do You Need?
Choosing between a CPA and tax accountant
depends on your specific financial needs. If you
need basic tax preparation and filing, a tax
accountant should suffice. However, if you need
IRS representation, auditing, financial
planning, or business consulting, a CPA is the
better choice.
Thank You
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