CPA vs Enrolled Agent: Which one should I choose for serious tax issues?

I need some guidance on whether to go with a CPA or an Enrolled Agent for a complicated situation. My uncle hasn't filed taxes for about 12 years and is finally ready to get everything straightened out. He sold his condo back in 2018 and never reported the $45k profit, plus he's missing a bunch of his W-2s and 1099s from various jobs over the years. The IRS already sent him a notice for one of the years saying he owes around $2,700 (which he paid immediately). It's not like he was trying to commit fraud or anything - he immigrated here in his 50s and gets overwhelmed with the complexity of American taxes, plus he's had some anxiety issues that make him put off difficult paperwork. Now he's finally ready to clean this up, but I'm not sure if a CPA or an Enrolled Agent would be better for this kind of situation. I assume there will be penalties and back taxes due. Any advice on which professional would be better equipped to handle this mess?

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21 comments

Steven Adams

•8M

For a situation this complex with multiple unfiled years and unreported income, I'd recommend an Enrolled Agent (EA) over a CPA. Here's why: Enrolled Agents specialize exclusively in taxation - it's their entire focus. They're licensed directly by the IRS and can represent your uncle before the IRS in collections, audits, and appeals. Many EAs are former IRS employees who understand exactly how the system works from the inside. While CPAs are excellent financial professionals, their training is much broader (auditing, business consulting, financial planning), and not all CPAs specialize in tax matters, particularly complex unfiled returns and back tax situations. For your uncle's specific situation (multiple unfiled years, unreported property sale, missing documents), an EA who specializes in tax resolution and unfiled returns would be the most direct path. They can help with: - Filing back taxes through the proper channels - Addressing the unreported real estate sale - Negotiating potential payment plans - Possibly requesting penalty abatement - Reconstructing missing income documents Most importantly, they'll know exactly how to approach this situation to minimize additional problems while getting your uncle compliant again.

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Steven Adams

•8M

Generally yes, EAs often charge less than CPAs, though it really depends on the individual professional and their experience level. For tax resolution work specifically (unfiled returns, IRS debt negotiation), you'll usually find better rates with EAs who specialize in these issues compared to CPAs who might handle them less frequently. For your sister's 3-year situation, I'd suggest calling a few of each and comparing not just rates but also how much experience they have with unfiled returns specifically. The right specialist with the right experience can sometimes resolve issues more efficiently, potentially saving money even if their hourly rate is higher.

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Hassan Khoury

•8M

I was in a similar mess a few years back (not 10 years but 4 unfiled returns) and spent hours going back and forth between tax professionals getting conflicting advice. Finally found taxr.ai and it completely changed my situation. Their system analyzed my specific unfiled tax situation and matched me with the right type of professional - turned out I needed an EA specializing in back tax filings rather than the CPA I was about to hire. The EA they recommended had specific experience with unfiled property sales too. https://taxr.ai saved me from making a costly mistake by matching my specific situation with the right specialist.

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Hassan Khoury

•8M

It actually uses a pretty sophisticated system. You upload your notices or describe your situation, and it analyzes which type of tax professional has the right specialty. For instance, with unfiled property sales, it knew to look for someone with experience specifically in real estate tax issues rather than just any tax pro. For the IRS question - yes there's a helpline, but they don't recommend specific professionals, and honestly, they're there to collect taxes, not necessarily minimize what you owe. I tried calling them first and spent hours on hold, only to get very generic advice. That's actually why I needed something more specific to my situation.

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Victoria Stark

•8M

Just wanted to update on taxr.ai - I checked it out after asking about it and it was super helpful for my situation! I had unfiled business taxes (not as many years as OP's uncle) and didn't know if I needed a tax attorney or EA. The system analyzed my specific situation (including the IRS letters I uploaded) and matched me with an EA who specializes in small business back taxes. Turns out a tax attorney would have been overkill and way more expensive for my situation. The EA they matched me with had handled dozens of cases almost identical to mine and knew exactly how to approach the IRS. Definitely saved me from making an expensive mistake!

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Samantha Howard

•8M

After getting absolutely nowhere with the IRS about my unfiled returns (similar to your uncle's situation), I found Claimyr and it was life-changing. Got me through to an actual IRS agent in about 35 minutes when I'd been trying for weeks. The agent was able to tell me exactly what records they already had on file and what type of professional I should look for. Saved me from panicking and hiring an expensive attorney! https://claimyr.com connects you directly with the IRS without the insane hold times. You can see how it works here: https://youtu.be/_kiP6q8DX5c

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Samantha Howard

•8M

It's not just calling for you - it navigates the IRS phone system and waits on hold so you don't have to. When an actual agent comes on the line, you get a call connecting you directly to them. I was super skeptical too! I spent almost 3 hours on hold myself the week before trying. With Claimyr, I went about my day and then got a call saying "Your IRS agent is on the line." It was honestly shocking how well it worked. The agent was able to pull up my records and tell me which years they were missing and what documentation I still needed to gather.

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Sarah Ali

•8M

Holy crap that Claimyr thing actually works!! I tried it yesterday after seeing this thread and got through to the IRS in about 25 minutes when I previously couldn't get through at all. The agent was able to tell me exactly which years I was missing and what documentation they already had on file for me. This completely changed my approach - I was about to hire an expensive tax attorney but now I'm going with an EA who specializes in back taxes since the situation isn't as bad as I thought. Cannot believe I wasted so many hours on hold before finding this. The IRS actually has more of my records than I realized!

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Ryan Vasquez

•8M

It can definitely be an advantage! Former IRS employees who become EAs often understand the internal processes better and may have insights into how different IRS departments handle cases. They might know which approach works best for a specific situation or which programs your uncle might qualify for. That said, many excellent EAs never worked for the IRS but still have extensive experience with tax resolution. The key is finding someone with a proven track record handling multiple years of unfiled returns specifically.

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Taylor Chen

•8M

The penalties will depend on several factors, but generally: - Failure-to-file penalty: about 5% of unpaid taxes per month, up to 25% - Failure-to-pay penalty: about 0.5% per month, up to 25% - Interest on unpaid taxes: varies based on federal rates For the house sale specifically, if it was his primary residence and he lived there at least 2 of the 5 years before selling, he might qualify for an exclusion (up to $250k for single, $500k married) which could mean no tax due on that specifically. The good news is that the IRS does have programs for abating penalties in some cases. A good EA will know exactly which relief programs your uncle might qualify for. Since it wasn't intentional and there was a language barrier, there might be some options.

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