I literally had a person harass me on Twitter over an article that I wrote regarding what a CPA can do versus what an EA can do. The crux of the article was my frustration with the Florida State Board of Accountancy, telling me that I couldn’t produce financial statements. I figured a way around it by labeling the statements differently. I mentioned the difference between an EA and a CPA, was that EAs are licensed by the Federal Government, to represent clients before the IRS, and are the only people Federally authorized practitioners to do so. All EAs specialize in taxation and tax issues.
I then mentioned that CPAs were licensed by the State in which they practice in, to audit, review, and compile financial statements. I mentioned that CPAs had to take one tax class in college and that one part of the CPA exam was based on taxes.
Somehow this infuriated some guy, that said everything from EAs lack the knowledge to set up businesses right, and lacked any business skills whatsoever. This is where it went too far, and I was forced to block this individual for the first time in my Twitter career.
To clear the air, I was, and am still able to sit for the CPA Exam. The reason I didn’t was I worked an internship for a year where I was regulated to a room where I analyzed cash flow statements and did cost accounting. None of which appealed to me. I often thought of changing my major. However, I got a job with an EA. I had no idea what that was, but I learned really quickly that the more I learned about tax, the more I enjoyed it. I even received a Master’s in Taxation.
Interestingly enough to my Twitter Troll, about 40% of my income comes from consulting businesses on how to set themselves up in a legal manner with a tax flare. In addition, I do a ton of tax planning and tax consulting, filling in the gaps of what other professionals have messed up. That isn’t to say that all CPAs do that, it is saying that I don’t make blanket statements. There are some really smart CPAs that specialize in taxation, but they aren’t licensed by the Federal Government to specialize in tax. It seems that they do tax as a way to make money five months out of the year.
When I talk about specializing in taxation, I wake up every morning around 4:30 am, and by 5:00 am I begin reading my emails from Thompson Reuters RIA, discussing all of the new tax law changes, and Tax Court cases. I read the whole email from beginning to end. I may not have a client that my reading applies to, but who knows what tomorrow will bring.
We live in Florida, and my wife Belsis and I are known to take a romantic weekend to the beach, every now and then. Living in Orlando, you are only 50 miles away from salt water. We like to go to the Gulf Coast because it is mostly secluded. Belsis and I will go to the beach, sit in chairs, and watch the waves roll in. There is a complete peace in that. She will bring her Entertainment Weekly and People Magazines. She will make fun of me because I will bring my tax magazines, to catch up on articles that I may have missed.
The point I think my Troll missed, is that there is a ton of creativity in tax. It is a lot more than compliance work, and filling out forms. You can set up entities and structures that not only provide protection, but can save the client tons in taxes. Not to mention that you can charge a lot of money for that.
That isn’t to say that I didn’t forget my lessons I learned at the internship I worked at. I have worked with start ups and worked with fixed and variable costs, even analyzed a cash flow statement here and there, but what gets me out of bed in the morning is tax.
Christmas came early for me this year with the Tax Cuts and Jobs Act of 2017. I was recovering from back surgery, and fortunately was afforded the opportunity to read the entire law, and write several articles regarding the changes. I secretly want to run for Congress and sit on the Ways and Means Committee, whose function is the Genesis of tax law.
The point I am making is an EA or a CPA have different specialties. What is wrong with that?