Greatest Hits: Enrolled Agents, The Liechtenstein of the Tax World

I had a draft written for a new, original post that was supposed to appear today. But the post needs refinement, and tax season is in full force right now, so I haven’t been able to finish the refining yet. So, I’m reaching into the greatest hits well for material this week.

From last summer, my editorial in which I compare CPAs to the United States and Enrolled Agents to Liechtenstein.

This article is a little dated now, because the RTRP designation has been shot down in court, but the overall point is the same — EAs are hopelessly outnumbered and overshadowed.


(Originally published July 27, 2012)

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.

Liechtenstein, kindred spirit to 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.)