IRS Enrolled Agent Exam (SEE) — All Questions

Treasury Circular 230 governs:

• a.Paid preparers' PTIN registration and fees only
• b.Practice before the IRS by EAs, CPAs, attorneys and others✓
• c.The conduct of IRS employees who examine and collect tax
• d.Procedures in the U.S. Tax Court, including admission to practice

Circular 230 (31 CFR Part 10) governs practice before the IRS: who may practice, the duties and restrictions on practitioners (due diligence, fees, conflicts, advertising), sanctions and disciplinary proceedings. IRS employee conduct is governed elsewhere, the Tax Court has its own admission rules, and PTIN registration is only one piece that touches preparers.

An EA's new client owns a large corporation and also needs help with a gift tax exam and a trust's Form 1041 notice. Which of these matters may the EA handle before the IRS?

• a.All of them; EAs have unlimited practice rights before the IRS✓
• b.Only the individual and corporate income tax matters
• c.Only matters that do not involve Appeals
• d.Only matters on returns the EA prepared and signed

Enrolled agents, like attorneys and CPAs, may represent any taxpayer on any matter before any office of the IRS (§10.3(c)). Limits tied to returns the preparer prepared and signed describe AFSP participants, and practice before the Tax Court requires separate admission by that court.

A taxpayer who receives a statutory notice of deficiency and disagrees with it may generally challenge the tax without first paying it by petitioning:

• a.The U.S. Court of Appeals
• b.The U.S. Tax Court✓
• c.The U.S. Court of Federal Claims
• d.A District Court

The Tax Court is the only forum in which a taxpayer can contest a deficiency without first paying it, by petitioning within 90 days (150 days if addressed outside the U.S.) of the notice of deficiency (§6213(a)). District courts and the Court of Federal Claims hear refund suits, which require payment first; courts of appeals hear appeals, not original petitions.

While preparing a client's 2025 return, an enrolled agent discovers that the client omitted $12,000 of income on the 2024 return, which the EA did not prepare. What does Circular 230 require the EA to do?

• a.Withdraw from the engagement unless the client amends the return
• b.Promptly notify the IRS of the omission, then advise the client
• c.Promptly advise the client of the omission and its consequences✓
• d.Amend the 2024 return for the client and file it promptly

Section 10.21 requires a practitioner who knows that a client has not complied with the revenue laws, or has made an error in or omission from any return, to advise the client promptly of the noncompliance, error or omission and its consequences. It does not require notifying the IRS, the EA cannot file an amended return without the client's authority, and withdrawal is not mandated (though it may be prudent if the client refuses to correct and the omission would affect future returns).

A paid tax return preparer is required to:

• a.Sign the return only if the preparer is an EA
• b.Sign the return and include a valid PTIN✓
• c.Sign the return and include his or her SSN
• d.Sign the return and include the firm's EFIN

A paid preparer must sign the return and include a preparer tax identification number (§6109(a)(4); Reg. 1.6109-2), subject to the §6695(b) and (c) penalties for failures. An EFIN identifies an authorized e-file provider, not the preparer on the return, and an SSN may not be used instead of a PTIN. All paid preparers must sign, not only EAs.

The IRS Independent Office of Appeals exists to:

• a.Decide whether examinations should be expanded to other years
• b.Review Tax Court decisions
• c.Approve liens and levies before Collection files them
• d.Resolve disputes without litigation, impartially✓

The IRS Independent Office of Appeals (§7803(e)) resolves federal tax controversies without litigation, on a basis that is fair and impartial to both the government and the taxpayer. It does not review Tax Court decisions, direct examinations or approve collection actions, although it hears Collection Due Process and CAP appeals of them.

Under Circular 230 §10.22, a practitioner must exercise due diligence in which of the following?

• a.Auditing the client's books to the standard used for audited financial statements
• b.Verifying independently every item of information the client provides
• c.Preparing and filing returns and the accuracy of representations✓
• d.Ensuring that every position taken will be sustained on examination

Section 10.22 requires due diligence in preparing, approving and filing returns and other documents, in determining the correctness of oral or written representations to the Treasury, and in determining the correctness of representations made to clients. A practitioner may rely in good faith on client information (§10.34(d)) and on the work of others if reasonable care was used in engaging and supervising them; no audit or guarantee of outcome is required.

Under Circular 230 §10.34, a practitioner may not sign a tax return or advise a position unless the position:

• a.Produces the lowest tax permitted under the client's facts
• b.Meets the §6694 standard and is not frivolous✓
• c.Has at least a more-likely-than-not chance of being sustained
• d.Is backed by a private letter ruling

Section 10.34(a) bars a practitioner from signing a return, or advising a position, that he or she knows or should know lacks a reasonable basis, is unreasonable under §6694(a) (generally requiring substantial authority, or reasonable basis with disclosure) or is a willful attempt to understate tax. More-likely-than-not is required only for tax shelter and reportable transaction positions, and no ruling is needed.

A client disputes an enrolled agent's $3,000 fee and asks for the W-2s, 1099s and bank statements she gave him, which she needs to file her return. State law lets practitioners keep client records for unpaid fees. What must the EA do?

• a.Promptly return the records she needs to meet her tax obligations✓
• b.Keep the records but give the IRS copies on request
• c.Return copies of the records and keep the originals until he is paid
• d.Keep the records until the fee is paid, since state law allows it

Section 10.28 requires a practitioner, at the client's request, to promptly return any and all records of the client necessary for the client to comply with federal tax obligations, even when there is a fee dispute. State law may allow the practitioner to retain his own work product, such as the return he prepared, until paid, but not the client's own records.

Circular 230 §10.35 requires that a practitioner:

• a.Accept only matters the practitioner has handled before
• b.Hold a degree in accounting or taxation from an accredited school
• c.Have the knowledge, skill and preparation the matter requires✓
• d.Carry professional liability insurance while representing clients

Section 10.35 requires competence: the appropriate level of knowledge, skill, thoroughness and preparation for the matter. Competence may be gained by consulting experts, studying the relevant law or associating with a competent practitioner, so a new type of matter is allowed. No degree or insurance is mandated.

When rendering written advice on a federal tax matter, Circular 230 §10.37 prohibits a practitioner from:

• a.Advise on any transaction with a tax-avoidance purpose
• b.Charge a fixed fee for written advice on a federal tax matter
• c.Deliver written advice by email rather than on paper
• d.Base the advice on unreasonable factual or legal assumptions✓

Section 10.37 requires written advice to be based on reasonable factual and legal assumptions, to consider all relevant facts the practitioner knows or reasonably should know, not to rely unreasonably on representations of the client or others, and not to take into account the likelihood of audit. Fixed fees and email delivery are permitted, and tax planning is legitimate.

The 'best practices' described in Circular 230 §10.33 are:

• a.Mandatory rules whose violation leads to suspension from practice
• b.Mandatory rules for written tax-shelter opinions
• c.Requirements that apply only to attorneys and CPAs, not to EAs
• d.Aspirational, and not by themselves grounds for sanction✓

The best practices in §10.33, such as communicating clearly with the client, establishing the facts and advising the client of the conclusions and penalty consequences, are aspirational goals for all practitioners. The separate duty in §10.33(b) for those with principal authority over a firm's practice is also framed as best practice. Violating them alone is not a sanctionable offense, unlike the mandatory duties in §10.20-§10.38.

Under Circular 230 §10.20, when the IRS makes a lawful request for records or information, a practitioner must:

• a.Refuse unless the client consents to disclosure in writing
• b.Submit them only when served with an IRS summons for the records
• c.Promptly submit them unless he believes they are privileged✓
• d.Submit them and identify other clients with the same issue

Section 10.20 requires a practitioner to promptly submit records or information in any matter before the IRS on a proper and lawful request by an IRS officer or employee, unless the practitioner believes in good faith and on reasonable grounds that they are privileged. If the records are not in the practitioner's possession, he must promptly tell the IRS so and provide any information he has about who has them. Identifying other clients is not required.

Circular 230 §10.23 provides that a practitioner may not:

• a.Unreasonably delay the prompt disposition of a matter✓
• b.Represent more than one client in the same IRS office at a time
• c.Communicate directly with an examiner once a manager is assigned
• d.Request an extension of time

Section 10.23 provides that a practitioner may not unreasonably delay the prompt disposition of any matter before the IRS. Requesting a reasonable extension for good cause is not unreasonable delay, and nothing bars representing several clients or talking to the examiner.

Under Circular 230 §10.34(c), a practitioner advising a client on a return position must inform the client of:

• a.The identity of the IRS examiner who will review the return
• b.The practitioner's malpractice insurance limits for the matter
• c.Likely penalties and how disclosure could avoid them✓
• d.The chance that the return will be selected for examination

Section 10.34(c) requires a practitioner to inform the client of any penalties reasonably likely to apply to a position taken on a return and of any opportunity to avoid them by disclosure (for example on Form 8275), and the requirements for adequate disclosure. The audit lottery may not be considered, and insurance or examiner identity is irrelevant.

A client tells an enrolled agent she paid $18,000 of cash wages to a nanny but has no W-2s, no Schedule H and no records. Under §10.34(d), what must the EA do before relying on her statement for the dependent care credit?

• a.Require bank records for every account before signing the return
• b.Refuse to prepare the return until the client files Schedule H
• c.Make reasonable inquiries about the incomplete information✓
• d.Rely on the statement, since clients may be believed in good faith

Section 10.34(d) lets a practitioner rely in good faith, without verification, on information furnished by the client, but the practitioner may not ignore the implications of information furnished or actually known, and must make reasonable inquiries if the information appears incorrect, inconsistent or incomplete. Here the missing payroll filings are a red flag. A complete audit of the client's accounts is not required.

Under Circular 230 §10.24, a practitioner may not knowingly:

• a.Accept help from a disbarred person in a practice matter✓
• b.Refer a client to an attorney in a matter with criminal exposure
• c.Prepare a return for a member of his or her immediate family
• d.Hire a former IRS employee after a two-year cooling-off period

Section 10.24 prohibits a practitioner from knowingly, directly or indirectly, accepting assistance from or assisting any person who is under disbarment or suspension from practice before the IRS, if the assistance relates to a matter constituting practice. Hiring former IRS employees is allowed subject to §10.25 screening, and preparing family returns and making referrals are permitted.

Circular 230 §10.36 makes an individual with principal authority over a firm's federal tax practice responsible for:

• a.Reviewing and signing every return the firm prepares as the reviewer of record
• b.Reporting each employee's Circular 230 violation to OPR within 30 days
• c.Obtaining the IRS's approval of the firm's written quality control policy
• d.Taking reasonable steps to ensure the firm has adequate compliance procedures✓

Section 10.36 requires individuals with principal authority over a firm's federal tax practice to take reasonable steps to ensure the firm has adequate procedures for all members, associates and employees to comply with Circular 230. They can be sanctioned for failing, through willfulness, recklessness or gross incompetence, to do so. Line-by-line review of every return and IRS approval of procedures are not required.

Which of the following is 'disreputable conduct' subject to sanction under Circular 230 §10.51?

• a.Charging a higher hourly rate than other local practitioners
• b.Conviction of a crime involving dishonesty or breach of trust✓
• c.Conviction of a misdemeanor traffic offense unrelated to tax practice
• d.Failing to renew a PTIN on time and then renewing it late

Section 10.51(a) lists disreputable conduct, including conviction of any criminal offense under federal tax laws, of any offense involving dishonesty or breach of trust, or of any felony that renders the practitioner unfit to practice. Minor offenses unrelated to honesty, a late PTIN renewal and higher-than-average (but not unconscionable) fees are not listed.

An enrolled agent is asked to represent both spouses in an innocent spouse proceeding in which the wife requests relief from the joint liability. Under §10.29, is there a conflict of interest?

• a.Yes, but only if the spouses have divorced
• b.No; spouses who filed jointly share one tax liability
• c.No; a conflict exists only between unrelated clients
• d.Yes; representing one spouse is directly adverse to the other✓

A conflict of interest exists under §10.29(a) if representing one client will be directly adverse to another client, or there is a significant risk that the representation will be materially limited by responsibilities to another client, a former client, a third person or the practitioner's own interest. A request for innocent spouse relief shifts liability to the other spouse, so the interests are directly adverse whether or not they have divorced. The EA may proceed only under the §10.29(b) conditions.

Even when a conflict of interest exists, Circular 230 §10.29 permits the representation only if, among other conditions, the practitioner:

• a.Obtains the approval of the IRS examiner or Appeals officer assigned to the matter
• b.Withdraws from one of the representations within 30 days of learning of the conflict
• c.Discloses the conflict to both clients orally and reduces his fee to each of them
• d.Reasonably believes he can represent each client competently and each gives informed written consent✓

Under §10.29(b) a practitioner may represent a client despite a conflict only if (1) he reasonably believes he can provide competent and diligent representation to each affected client, (2) the representation is not prohibited by law, and (3) each affected client waives the conflict by informed consent at the time the conflict is known, confirmed in writing within a reasonable period (no later than 30 days). IRS approval, withdrawal and a fee reduction are not the test, and oral disclosure alone is insufficient.

Under Circular 230 §10.29, a client's written consent to conflict-of-interest representation must be retained by the practitioner and be available to the IRS for at least:

• a.36 months after the representation ends✓
• b.36 months after the consent is signed
• c.24 months after the representation ends
• d.7 years after the return is filed

Section 10.29(c) requires the practitioner to retain copies of the written consents for at least 36 months from the date the representation of the client concludes, and to provide them to any IRS officer or employee on request. The period runs from the end of the representation, not from the signing of the consent.

Under Circular 230 §10.27, a practitioner may generally NOT charge a contingent fee for:

• a.A claim solely for a refund of interest or penalties
• b.Preparing a client's original return✓
• c.Services during the IRS examination of an original return
• d.A judicial proceeding under the Code

Section 10.27(b) generally bars contingent fees for services in any matter before the IRS, including preparing an original return. The listed exceptions allow a contingent fee for services in connection with an IRS examination of, or challenge to, an original return (or an amended return or claim filed within 120 days of the written examination notice), for a claim solely for credit or refund of interest or penalties, and for a judicial proceeding under the Code.

Circular 230 §10.27 permits a contingent fee for services connected with the IRS's examination of an amended return or refund claim only if that amended return or claim was:

• a.Filed within 120 days of the taxpayer's written notice of examination✓
• b.Filed within 90 days of the taxpayer's written notice of examination
• c.Filed within 120 days after the original return itself was filed
• d.Filed within 3 years after the original return, inside the refund statute

Section 10.27(b)(2) allows a contingent fee for services rendered in connection with the IRS's examination of, or challenge to, (i) an original return, or (ii) an amended return or claim for refund or credit filed within 120 days of the taxpayer receiving a written notice of the examination of, or a written challenge to, the original return. The 120 days measure when the amended return or claim was filed, not the refund statute; 90 days is the Tax Court petition period.

Apart from restricting contingent fees, Circular 230 §10.27 also prohibits a practitioner from charging:

• a.A flat fee for a return
• b.A fee paid in advance
• c.An hourly fee above $500
• d.An unconscionable fee✓

Section 10.27(a) prohibits a practitioner from charging an unconscionable fee in connection with any matter before the IRS. Circular 230 sets no hourly cap and permits advance fees and flat fees; contingent fees are restricted separately by §10.27(b).

Circular 230 §10.30, governing solicitation, prohibits a practitioner from:

• a.Stating in an ad that he or she is enrolled to practice before the IRS
• b.Describing his or her enrolled-agent status on a business card
• c.Using a false, fraudulent, misleading, deceptive or coercive statement✓
• d.Advertising fixed fees for routine services such as a Form 1040

Section 10.30(a) prohibits using or participating in any form of public communication or private solicitation containing a false, fraudulent or coercive statement or claim, or a misleading or deceptive statement. Advertising fixed fees and truthfully describing enrollment is permitted; an EA may say 'enrolled to represent taxpayers before the Internal Revenue Service' but may not use the term 'certified' or imply employment by the IRS.

Under Circular 230 §10.30, a practitioner who publishes a schedule of fees must honor those published fees for:

• a.12 months after the schedule was first published
• b.The rest of the calendar year in which it was published
• c.At least 60 calendar days after the schedule was first published
• d.At least 30 calendar days after the schedule was last published✓

A practitioner must adhere to published fee schedules, and fee information, for at least 30 calendar days after the last date on which the schedule was published (§10.30(b)(3)).

Circular 230 §10.31 prohibits a practitioner who prepares a tax return from:

• a.Advise a client to apply a refund to next year's estimated tax
• b.Endorse or negotiate a client's federal tax refund check✓
• c.Charge a separate fee for electronic filing of the return
• d.Arrange direct deposit of a refund to the client's own account

Section 10.31 prohibits a practitioner who prepares returns from endorsing or otherwise negotiating (including by directing a deposit to an account under the practitioner's control) any check issued to a client for federal taxes. The matching preparer penalty is §6695(f). Advising an overpayment credit, charging for e-filing and depositing refunds to the client's own account are allowed.

An unenrolled return preparer who holds an Annual Filing Season Program (AFSP) Record of Completion may:

• a.Represent clients in collection matters for returns the preparer prepared
• b.Represent clients in exams of returns the preparer prepared and signed✓
• c.Represent clients before Appeals on returns the preparer prepared and signed
• d.Represent any taxpayer before revenue agents in an examination of any return

Under Rev. Proc. 2014-42, an AFSP Record of Completion holder has limited representation rights: only for returns he or she prepared and signed (for returns filed after 2015), and only before revenue agents, customer service representatives and similar IRS employees, including the Taxpayer Advocate Service. AFSP participants may not represent clients before Appeals, revenue officers (Collection), Counsel or similar officers.

An enrolled actuary authorized under Circular 230 §10.3(d) may practice before the IRS:

• a.On any federal tax matter, with the same rights as an enrolled agent
• b.Only on employment tax matters for plan sponsors
• c.Only on specified retirement plan and actuarial issues✓
• d.Only on estate and gift tax valuation matters involving annuities

Section 10.3(d) limits enrolled actuaries to practice concerning issues under specified Code provisions dealing with qualified retirement plans and related actuarial matters (for example §401, §404, §412, §4971). Unlimited practice rights belong to attorneys, CPAs and enrolled agents.

Ivy worked for 6 continuous years as an IRS revenue agent applying the Code and regulations for individual and business returns. She left the IRS last year. How can she become an enrolled agent?

• a.Complete the Annual Filing Season Program for 3 years
• b.Apply based on her IRS experience, subject to review and a suitability check✓
• c.She is automatically enrolled when she leaves the IRS
• d.She must pass all three SEE parts like any other applicant

Under §10.4(b), a former IRS employee with at least five years of continuous employment regularly applying and interpreting the Code and regulations in the relevant areas may be granted enrollment without the examination, on application within 3 years after leaving and after a tax compliance and suitability review. Others qualify by passing the SEE (§10.4(a)).

To renew enrollment, an enrolled agent must complete continuing education totaling:

• a.48 hours per 3-year cycle, at least 16 each year, 2 of them ethics
• b.72 hours per cycle, at least 16 a year, including 2 of ethics✓
• c.24 hours each year, 2 of them in ethics or professional conduct
• d.72 hours per 3-year cycle, with no annual minimum requirement

Section 10.6(e) requires an enrolled agent to complete at least 72 hours of continuing education in each 3-year enrollment cycle, with a minimum of 16 hours in each year, including 2 hours of ethics or professional conduct each year.

Within an enrolled agent's continuing-education requirement, the minimum ethics or professional-conduct component is:

• a.2 hours of ethics or professional conduct each year✓
• b.2 hours of ethics per cycle, in the final year
• c.6 hours of ethics per cycle, taken in any year
• d.4 hours of ethics or professional conduct each year

Section 10.6(e)(2) requires 2 hours of ethics or professional conduct in each year of the enrollment cycle, counted within the 16-hour annual minimum. Taking 6 hours in one year does not satisfy the annual requirement for the other years.

Enrolled agents renew enrollment on a staggered three-year cycle determined by:

• a.The state where the agent practices
• b.The anniversary of the agent's enrollment
• c.The last digit of the agent's SSN or TIN✓
• d.The month the agent passed the last SEE part

Enrollment renewal cycles are staggered by the last digit of the enrolled agent's Social Security number or TIN (§10.6(d)). Renewal is filed on Form 8554 (or online).

Responsibility for enforcing Circular 230 and handling enrolled-agent discipline rests with the:

• a.The IRS Office of Professional Responsibility✓
• b.The IRS Independent Office of Appeals
• c.The Treasury Inspector General for Tax Administration
• d.The IRS Return Preparer Office

The Office of Professional Responsibility administers and enforces Circular 230, including practitioner discipline (§10.1(a)). The Return Preparer Office handles PTINs, enrollment and the AFSP; TIGTA oversees IRS operations and employees; Appeals resolves tax disputes.

An EA's enrollment expires this cycle, and she has completed her CE. Which form does she file to renew her enrollment?

• a.Form 23
• b.Form W-12
• c.Form 8554✓
• d.Form 8821

An enrolled agent renews enrollment on Form 8554, Application for Renewal of Enrollment to Practice Before the IRS. Form 23 is the initial application, Form W-12 applies for or renews a PTIN, and Form 8821 is a tax information authorization.

An EA did not complete her required CE for the enrollment cycle and did not file a timely renewal. What is her status?

• a.Disbarred after a hearing before a judge
• b.Inactive; she may not practice until the requirements are met✓
• c.Active for 1 more year while she makes up the hours
• d.Suspended for 5 years, then eligible to petition

An enrolled agent who fails to meet the renewal or continuing education requirements is placed in inactive status and may not practice before the IRS or hold out as an enrolled agent until reinstated; continued failure leads to inactive retirement status (§10.6(k)). This is not a disciplinary sanction.

Regarding continuing education, an enrolled agent must:

• a.Keep records of CE hours only until the next renewal is approved
• b.Take all CE from a single IRS-approved provider each cycle
• c.Send each CE certificate to the IRS within 60 days of completion
• d.Keep records of CE hours for 4 years after the renewal date✓

Section 10.6(h) requires an enrolled agent to retain records of qualifying CE, such as the program sponsor, title, credit hours and the certificate, for 4 years following the date of renewal of enrollment. Certificates are not sent to the IRS unless requested, and any IRS-approved provider may be used.

Which person may represent a taxpayer before the IRS without being an attorney, CPA, EA or other practitioner?

• a.A full-time employee representing the employer✓
• b.An unenrolled preparer with a PTIN, for any client
• c.A paid bookkeeper who keeps the taxpayer's records
• d.A former IRS revenue agent with 3 years of experience

Section 10.7(c) allows limited practice without enrollment by, among others, an individual representing himself or a member of his immediate family, a regular full-time employee representing the employer, a general partner representing the partnership, and a bona fide officer representing the corporation. IRS experience alone does not confer practice rights (5 years of qualifying employment can lead to enrollment), and a PTIN or bookkeeping role does not either.

Circular 230 §10.25 restricts former government employees from:

• a.Representing anyone on a matter they worked on personally and substantially✓
• b.Representing anyone before the IRS for 2 years after leaving government service
• c.Preparing any return for 1 year after leaving government
• d.Becoming enrolled agents without passing the SEE

Section 10.25 imposes post-employment restrictions: a former government employee may not represent anyone in a particular matter involving specific parties in which he or she participated personally and substantially while in government, with narrower time-limited bars for matters under official responsibility. There is no general bar on practice. Five years of qualifying IRS employment can be an alternative to the SEE, but that is a benefit, not a restriction.