Do I need a local accountant or CPA for my LLC taxes? Cheaper alternatives?

Does the IRS care if I use a CPA vs an EA? Will using a non-CPA raise red flags? And since I've got multiple years unfiled, am I risking an audit by using someone with less credentials?

The IRS doesn't care whether you use a CPA, EA, or other tax preparer - they're concerned with accuracy, not credentials. Using a non-CPA doesn't raise any red flags whatsoever with the IRS. For multiple unfiled years, what matters most is getting accurate returns filed as soon as possible, regardless of who prepares them. The risk of audit comes from filing inaccurate returns or continuing not to file, not from your choice of preparer. An EA is actually specifically trained in dealing with the IRS and many specialize in helping businesses catch up on unfiled returns. Some EAs are former IRS employees with deep knowledge of how to navigate these situations effectively.

Is there a big difference in how much they charge? Like ballpark figures for CPA vs EA for handling multiple years of LLC taxes? And do you think it matters what industry my business is in?

CPAs typically charge 30-50% more than EAs for similar services. For multiple years of LLC filings, a CPA might charge $2,500-4,000+ depending on complexity, while an EA might charge $1,500-2,500. These are rough estimates and vary widely by location and the specific situation. Yes, your industry absolutely matters. If you're in a specialized industry with unique tax considerations (construction, real estate, healthcare, e-commerce, etc.), look for someone with experience in that field. They'll be familiar with industry-specific deductions, typical expense patterns, and compliance requirements. An EA or tax preparer who specializes in your industry may provide more value than a general CPA without that specific experience.

How does that service compare to using an EA? Does it just connect you with tax pros or is there some AI component that helps organize everything first? I'm terrible with organizing receipts and documentation.

Sounds interesting but I'm skeptical. Did they actually help with the multi-year backlog situation or just the current year? And did they help with any penalty abatement requests? That's what I'm most worried about.

They connected me with an EA who specializes in LLCs, but what made it different was their AI document processing first. I literally uploaded years of statements and invoices in a jumbled mess, and their system organized everything by tax year and category before my tax pro even looked at it. Saved me hours of sorting through paperwork. Yes, they absolutely handled my multi-year backlog - all 3 years I needed to file. The EA they matched me with specifically dealt with the IRS on penalty abatement requests. I still had to pay some penalties, but they got a good chunk of them removed by explaining my situation professionally. The whole process was way less stressful than I expected.

How does the process work? Do you still talk to an actual person or is it all automated? I'm worried about missing something important by not sitting down face-to-face with someone.

Did they help with the state tax filings too or just federal? I'm in California and our state taxes are a nightmare for LLCs with the franchise tax and all that.

You definitely work with a real person! The AI part is just for organizing and analyzing your documents. I had video calls with my tax pro who explained everything. Some people prefer in-person, but I actually found the video calls more convenient since I could do them outside business hours. They absolutely handled my state taxes too. I'm in New York which also has complicated state requirements for LLCs. They paired me with someone who specifically knew NY tax law. For California, I know they have specialists because my business partner uses them for his California LLC. The franchise tax minimum and all those weird CA-specific forms were no problem for them.

Wait how exactly does this work? You're saying they just sit on hold for you? Why can't I just use speakerphone while I work? Seems like an unnecessary expense.

This sounds like a scam. No way they actually get you through to a real IRS agent when it took me literally 6 attempts and 3+ hours on hold last time I called. Plus, wouldn't the IRS need to verify it's actually YOU calling?

It's not just staying on hold - they navigate the complex IRS phone tree and use timing data to call at optimal times when wait times are shortest. I tried the speakerphone thing too, but kept getting disconnected after 1-2 hours of waiting, which was incredibly frustrating. When they get an agent, they call you and connect you directly to that agent. You're the one who speaks to the IRS - they just handle the waiting part. The IRS verification happens when you're connected and speaking directly with the agent, so there's no security issue. I was skeptical too until I realized I'd wasted an entire day trying to get through myself with no success.

How much does this cost? Seems like it would be expensive just to have someone wait on hold. Couldn't I just use speakerphone while I work on other stuff?

This sounds sketchy. Giving someone else access to talk to the IRS for you? Don't they need your personal info and SSN to verify your identity? Seems like a security risk.

The speakerphone approach sounds good in theory, but in practice, I found myself getting disconnected after long waits, having to start over, or missing the agent when they finally answered because I stepped away. The IRS hold times can be unpredictable - sometimes 20 minutes, sometimes 3+ hours. They don't actually talk to the IRS for you - that's the important part. When an agent comes on the line, they call you and connect you directly to that agent. You're the one who provides all verification info and has the actual conversation. They

How did you find your EA? Did you just google or was there a specific place to look for someone with industry expertise? I'm in construction and feel like my taxes need someone who understands that specific field.

I found my EA through the National Association of Enrolled Agents directory on their website. You can search by specialty and location there. For construction specifically, look for someone who mentions experience with construction companies or contractors in their profile. Word of mouth is even better though - I asked other construction business owners in my local contractor association who they used. Industry-specific expertise is super valuable because they'll know exactly which deductions and credits apply to your business and understand the unique cash flow challenges in construction.

Totally agree with this! I live in California and my first tax preparer was from Nevada. They had no idea about all our weird CA-specific requirements and I ended up with a state tax notice. Now I use someone who specializes in California business taxes even though they're actually based in Oregon. It's the expertise that matters, not their physical location.

This is really helpful advice! I'm curious about the penalty abatement process you mentioned. When you say they can get penalties "reduced or waived entirely" - what kinds of circumstances typically qualify for this? I'm worried that just being overwhelmed and procrastinating won't be a good enough reason for the IRS to waive penalties. Did you have a specific hardship or was it more about how the request was presented? Also, when you mention finding someone with "experience in penalty abatement" - is this something I should specifically ask about when interviewing tax professionals, or is it just assumed that EAs can handle this?

Great question about penalty abatement! The IRS actually accepts several types of "reasonable cause" beyond just financial hardship. Being overwhelmed can qualify if it's presented properly - especially if you can show circumstances like illness, family emergencies, natural disasters, or even relying on a tax professional who failed you. The key is having your tax pro draft a detailed letter explaining your specific situation rather than just saying you procrastinated. You should definitely ask specifically about penalty abatement experience when interviewing tax professionals. Not all EAs handle this regularly, and experience matters a lot here. Ask them about their success rate with first-time penalty abatement requests and whether they've dealt with multi-year situations like yours. A good EA will know exactly which IRS forms to file (like Form 843) and how to structure the reasonable cause argument effectively. In my case, my EA got most penalties waived by explaining that I had been dealing with a family medical emergency that consumed all my attention for over a year. Even if your situation isn't as dramatic, there are often legitimate reasons that just need to be presented professionally to the IRS.