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Alphabet Soup

A few months ago I was selected by the company Nerd Wallet to be on their adviser board.  What happens is that the general public goes to Nerd Wallet’s website, and they “Ask an Advisor” financial questions.  I am one of the advisors that was handpicked by Nerd Wallet to answer questions.  One day I was looking at some other advisor’s answers and it occurred to me that I have no idea what some of the letters after the advisor’s names meant.  This variable alphabet soup, probably has the general public confused as to what they stand for, and what each designation qualifies a professional to do.  This week I am going to demystify the designation acronyms of the professionals in the accounting world.

My signature, with designations, is Craig W. Smalley, E.A., C.E.P.®, C.T.R.S.®.  E.A. is an acronym for Enrolled Agent, C.E.P.® is Certified Estate Planner™, and C.T.R.S.® is Certified Tax Resolution Specialist™.  I will get to those in a moment.  First let’s start with the most known of designations in the accounting profession, C.P.A.

C.P.A. is an acronym for Certified Public Accountant.  CPA’s are certified by the State that they practice in.  They are licensed to certify numbers.  They review, audit, or compile company’s records, and certify that the numbers are true and correct.  CPA’s certified numbers and audited financial statements are relied on by investors on Wall Street that are reading financial statements, insurance companies, the Federal Government to give contracts to businesses, etc.  CPA’s take a four part examination.  Three parts have to do with certifying numbers, and the fourth part has to do with taxes.  Because of this CPA’s are grandfathered in, and are allowed to represent taxpayers before the Internal Revenue Service.  I would like to point out that most CPA’s don’t practice tax, however there are some that specialize in it.

E.A. is an acronym for Enrolled Agent.  EA’s are licensed by the United States Treasury to represent taxpayers before the Internal Revenue Service.  Enrolled Agents possess the highest level of authorization given by the IRS.  An EA can represent a taxpayer from examinations, collections, and appeals.  EA’s are tax professionals, and all EA’s specialize in tax.  The difference between a CPA and an EA is a CPA is more like a family doctor, and an EA is like a surgeon.  When I took the Special Enrollment Exam it was a two day four part examination given once per year.  Today it is a three part examination.  The exam covers individual taxation, partnership taxation, corporate taxation, S-Corporation taxation, retirement plans, and ethics.

C.E.P.® is an acronym for Certified Estate Planner™.  A CEP is certified by the National Institute of Certified Estate Planners.  They are typically tax or financial professionals.  They have to take a month long course and a rigorous examination at the end of the course.

C.T.R.S.® is an acronym for a Certified Tax Resolution Specialist™.  A CTRS is certified by the American Society of Tax Problem solvers.  They specialize in IRS collections and audits, and must take a rigorous examination to become certified.

This is the alphabet soup of practitioners.

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