The exam is divided into 3 broad modules.

Part 1: Individuals

Sample questions

Domain 1: Preliminary Work and Taxpayer Data that consists of 14 Questions based on the following subtopics:

• Use of prior years' returns for comparison, accuracy, and carryovers for current year's return
• Taxpayer personal information (e.g., date of birth, marital status, dependents, identity
• protection PIN, state issued photo ID)
• Residency status and/or citizenship (e.g., , visas, green cards, resident alien or non-resident alien, ITIN)
• Filing requirements and due date
• Taxpayer filing status
• Sources of worldwide taxable and non-taxable income (e.g., interest, wages, business, sales of property, dividends, rental income, flow-through entities, alimony received)
• Sources of applicable exclusions and adjustments to gross income (e.g., foreign earned income exclusion, retirement plans, HSAs, alimony paid, health insurance, self-employment tax)
• Sources of applicable deductions (e.g., itemized, standard)
• Qualifications for dependency
• Sources of applicable credits (e.g., education, foreign tax, child and dependent care, credit for other dependents, child tax credit)
• Sources of tax payments and refundable credits
• Previous IRS correspondence with taxpayer
• Additional required returns to be filed, and taxes paid (e.g., employment, gifts, international information returns, and other information returns)
• Special filing requirements (e.g. foreign income, presidentially declared
• Foreign account and asset reporting (e.g., FBAR, Form 8938) 
• Minor children's unearned income (“Kiddie” tax) 
• ACA requirements (e.g., , total household income, premium tax credit, household size)

Domain 2: Income and Assets 17 Questions. This is further subdivided into 4 parts. 

Income:

• Taxability of wages, salaries and other earnings
• Interest Income (e.g., taxable and non-taxable)
• Dividends and other distributions from mutual funds, corporations, and other entities
• Personal property rental
• Gambling income and allowable deductions (e.g., Form W-2G, documentation)
• Tax treatment of cancellation of debt (e.g., Form 1099C, foreclosures, insolvency)
• Tax treatment of a U.S. citizen/resident with foreign income (e.g., tax treaties, Form 1116, Form 2555, Form 3520, Form 5471) 
• Other income (e.g., scholarships, barter income, hobby income, alimony, non-taxable combat pay, unearned income, taxable recoveries, NOL, illegal income) 
• Constructive receipt of income 
• Constructive dividends (e.g., payments of personal expenses from a business entity)
• Passive income and loss
• Pass-through income (e.g., Schedule K-1, income, deductions, basis, qualified business income (QBI) items) 
• Royalties and related expenses 
• State/local income tax refund and other itemized deduction recoveries -1099 MISC, 1099 NEC, 1099 K reporting, irregularities, and corrections

Retirement income 

• Basis in a traditional IRA (Form 8606) 
• Comparison of and distributions from traditional and Roth IRAs 
• Distributions from qualified and non-qualified plans (e.g., pre-tax, after-tax, rollovers, Form 1099R, qualified charitable distribution) 
• Excess contributions and tax treatment (e.g., penalties) 
• Penalties and exceptions on premature distributions from qualified retirement plans and IRAs 
• Prohibited transactions and tax consequences 
• IRA conversions and recharacterization (Form 8606) 
• Required minimum distributions 
• Loans from qualified plans 
• Taxability of Social Security and Railroad Retirement benefits 
• Inherited retirement accounts 
• Foreign pensions and retirement income

Property, real and personal income 

• Sale or disposition of property including depreciation recapture rules and 1099A
• Capital gains and losses (e.g., netting effect, short-term, long-term, mark-to-market, virtual currency) 
• Basis of assets (e.g., purchased, gifted or inherited) 
• Basis of stock after stock splits and/or stock dividends (e.g., research, schedules, brokerage re cords) 
• Publicly traded partnerships (PTP) (e.g., sales, dispositions, losses) 
• Sale of a personal residence (e.g., IRC sec 121 exclusions) 
• Installment sales (e.g., related parties, original cost, date of acquisition, possible recalculations and recharacterization) 
• Options (e.g., stock, commodity, ISO, ESPP) 
• Like-kind exchange 
• Non-business bad debts 
• Investor versus trader

Adjustments to Income 

• Self-employment tax 
• Retirement contribution limits and deductibility (e.g., earned compensation requirements) 
• Health savings accounts 
• Other adjustments to income (e.g., student loan interest, alimony, moving expenses for active military, write-in adjustments) 
• Self-Employed Health Insurance

Domain 3: Deductions and Credits

This domain consists of 17 questions based on the following subtopics:

Itemized Deductions and Qualified Business Income (QBI)

• Medical, dental, vision, and long-term care expenses.
• Various taxes (e.g., state and local, personal property, real estate).
• Interest expense (e.g., mortgage interest, investment interest, tracing rules, points, indebtedness limitations).
• Charitable contributions (e.g., cash, non-cash, limitations, documentation required).
• Non-business casualty and theft losses.
• Other itemized deductions.
• Itemized deductions for Form 1040-NR.
• Qualified Business Income (QBI) deduction.

Credits

• Child and dependent care credit.
• Child tax credit and credit for other dependents.
• Education credits.
• Foreign tax credit.
• Earned Income Tax Credit (EITC) (e.g., paid preparer's earned income credit checklist, eligibility, and disallowance).
• Adoption credits (e.g., carryovers, limitations, special needs).
• Affordable Care Act (ACA) premium tax credit.
• Other credits (refundable and non-refundable) (e.g., health coverage tax credit, energy credits, retirement savings contribution credit).

Domain 4: Taxation

This domain consists of 15 questions based on the following subtopics:

• Alternative Minimum Tax (AMT) and credit for prior years.
• Household employees.
• Underpayment penalties and interest.
• Self-employment tax.
• Excess Social Security withholding.
• Tax provisions for members of the clergy.
• Tax provisions for members of the military.
• Income in respect of a decedent.
• Net Investment Income Tax (NIIT).
• Additional Medicare Tax.
• Uncollected Social Security and Medicare tax.
• Other taxes (e.g., first-time homebuyer credit repayment).

Domain 5: Advising the Individual Taxpayer

This domain consists of 11 questions based on the following subtopics:

• Reporting obligations for individuals (e.g., 1099, bartering, cash).
• Property sales (e.g., homes, stock, businesses, antiques, collectibles).
• Education planning (e.g., Lifetime Learning Credit, IRC Section 529 plans).
• Estate planning (e.g., gift versus inheritance, trusts, family partnerships, charitable giving, long-term care, life insurance).
• Retirement planning (e.g., annuities, IRAs, employer plans, early retirement rules, required minimum distribution, beneficiary ownership, charitable distributions from an IRA).
• Marriage and divorce (e.g., divorce settlement, common-law, community property, alimony).
• Items that affect future or past returns (e.g., carryovers, net operating loss, Schedule D, Form 8801, negative QBI carryover).
• Injured spouse.
• Innocent spouse.
• Estimated tax and penalty avoidance (e.g., mid-year estimated tax planning).
• Adjustments, deductions, and credits for tax planning (e.g., timing of income and expenses).
• Character of transaction (e.g., use of capital gain rates versus ordinary income rates).
• Advantages and disadvantages of MFJ/MFS/HOH filing statuses in various scenarios (e.g., joint and several liability).
• Conditions for filing a claim for refund (e.g., amended returns).
• Penalty of perjury.

Domain 6: Specialized Returns for Individuals

This domain consists of 11 questions based on the following subtopics:

Estate Tax

• Gross estate and taxable estate (calculations and payments), unified credit.
• Jointly held property.
• Marital deduction and other marital issues (e.g., portability election).
• Life insurance, IRAs, and retirement plans.
• Estate filing requirements and due dates (e.g., Form 706, Form 1041).

Gift Tax

• Gift-splitting.
• Annual exclusion.
• Unified credit.
• Effect on estate tax (e.g., generation-skipping transfer tax).
• Filing requirements (e.g., Form 709).

International Information Reporting

• Filing and reporting requirements and due dates (e.g., FBAR, Form 8938, Form 8865, Form 5471, Form 3520).
• Covered accounts (e.g., FBAR, Form 8938).
• Potential penalties (e.g., failure to file, underreporting, substantially incomplete forms, statute of limitations, reduction of tax attributes).
• Distinctions between FBAR and Form 8938 requirements.

Part 2: Businesses

Sample Questions

Domain 1: Business Entities and Considerations (30 Questions)

Business Entities

• Sole proprietorships
• Partnerships and qualified joint ventures (QJV)
• Corporations
• S corporations
• LLCs
• Tax-exempt entities and associations
• Entity type default classifications and elections
• Employer identification number
• Accounting periods (tax year)
• Reporting requirements (e.g., Forms W-2, W-4, Form 1099)
• Hobby versus business determination and loss limitations

Partnerships

• Partnership income, expenses, distributions, and flow-through (e.g., self-employment income)
• Family partnerships
• Partner's dealings with partnership (e.g., exchange of property, guaranteed payments)
• Contribution of property and/or services to a partnership (e.g., partnership's basis, property subject to indebtedness)
• Basis of partner's interest
• Disposition of partner's interest
• Partnership formation (e.g., partnership agreement, general vs limited partners, capital contributions)
• Dissolution of partnership (e.g., sale, death of partner)
• Filing requirements, due dates, penalties, and audit notice requirements
• Partnership cancellation of debt
• Partnership level audit and opt-out

Corporations in General

• Filing requirements, due dates, and penalties
• Earnings and profits
• Shareholder dividends, distributions, and recognition requirements
• Special deductions and credits (e.g., dividends received deductions, charitable deduction)
• Liquidations and stock redemptions
• Accumulated earnings tax
• Estimated tax payments
• Corporate minimum tax credit

Forming a Corporation

• Services rendered to a corporation in return for stock
• IRC section 351 exchange
• Transfer and/or receipt of money or property in addition to corporate stock
• Transfer of property subject to indebtedness
• Controlled groups
• Closely held corporations

S Corporations

• Requirements to qualify (e.g., qualifying shareholders)
• Election procedure
• Income, expenses, and separately stated items
• Treatment of distributions
• Shareholder’s basis (e.g., loan basis, distributions and losses in excess of basis, services for stock)
• Revocation, termination, and reinstatement
• Debt discharge

Domain 2: Business Tax Preparation (37 Questions)

Business Income

• Gross receipts and other income
• Cost of goods sold (e.g., inventory practices, expenditures included, uniform capitalization rules)
• Net income/loss and at-risk limitations
• Cancellation of business debt

Business Expenses, Deductions, and Credits

• Officers and employees’ compensation (e.g., deductibility, fringe benefits, rules of family employment, statutory employee, necessary and reasonable)
• Business rental deduction, including self-rentals
• Depreciation, amortization (start-up and organizational cost), IRC section 179, depletion, bonus depreciation, and correcting errors
• Business bad debts
• Business travel, meals, and gift expenses
• Vehicle use and expenses
• Interest expense
• Insurance expense
• Taxes (e.g., deductibility of taxes, assessments, and penalties; proper treatment of sales taxes paid, excise)
• Employment taxes
• Casualties, thefts, and condemnations
• Qualified business income (QBI) (e.g., SSTB, calculations, phase out, UBIA)
• Eligibility and deductibility of general business credits (e.g., disabled access credit, R&D credit, small business healthcare tax credit, foreign tax credit)
• Net operating loss deduction
• Home office

Business Assets

• Basis of assets
• Disposition of property or assets
• Like-kind exchange
• Converted property
• Capitalization and repair regulations (e.g., elections)

Analysis of Financial Records

• Proper business type, the use of classification codes, and year-to-year comparison
• Income statement
• Balance sheet (e.g., proofing beginning and ending balances, relationship to income statement and depreciation)
• Method of accounting and changes (e.g., accrual, cash, hybrid, Form 3115)
• Depreciation recovery (e.g., recapture, IRC sec 280F)
• Pass-through activity (e.g., K-1, separately stated items, non-deductible expenses)
• Reconciliation of tax versus books (e.g., M-1, M-2, M-3)
• Related party activity
• Loans to and from owners

Advising the Business Taxpayer

• Reporting and filing obligations (e.g., extended returns and potential penalties, international information returns, Form 1099 series, Form 8300)
• Payments and deposit obligations (e.g., employment tax, excise tax)
• Record-keeping requirements (e.g., mileage log, accountable plans)
• Selection of business entity (e.g., benefits and detriments)
• Comingling (e.g., personal usage of business accounts, separation of business and personal accounts)
• Advice on accounting methods and procedures (e.g., explanation of requirements)
• Transfer of property in or out of the business
• Life cycle of the business (e.g., formation, dissolution)
• Type of industry (e.g., specified service business owners)
• Worker classification (e.g., independent contractor versus employee, outside sales, full-time versus part-time)
• Deductions and credits for tax planning (e.g., timing of income and expenses, NOL, depreciation versus IRC section 179 versus bonus depreciation)
• ACA compliance

Domain 3: Specialized Returns and Taxpayers (18 Questions)

Trust and Estate Income Tax

• Trust types (e.g., simple/complex, grantor, irrevocable, tax shelters, foreign)
• Distributable net income and accounting income
• Exclusions, exemptions, and deductions
• Fraudulent trusts
• Income (e.g., allocations, corpus versus income)
• Separately stated items (e.g., items reported on the K-1)
• Filing requirements, tax years, and penalties

Exempt Organizations

• Qualifying for and maintaining tax-exempt status (e.g., IRC 501(c))
• Applying for IRS tax-exempt status (e.g., Form 1023, Form 1024)
• Filing requirements (e.g., Form 990 series)
• Unrelated business taxable income

Retirement Plans

• Employer and employee contributions
• Reporting requirements
• Plans for self-employed persons (e.g., SEP and SIMPLE)
• Prohibited transactions
• Qualified and non-qualified plans
• Non-discrimination rules

Farmers

• Farm income (e.g., livestock, crop insurance proceeds, subsidies, patronage dividends, conservation payments)
• Depreciation for farmers
• Disaster-area provisions (e.g., drought, flood, other weather-related conditions)
• Farm rental (e.g., Form 4835)
• Farm tax computation (e.g., Schedule J, Schedule SE, estimated tax)

Rental Property

• Real estate professional qualifications
• Commercial rentals versus residential rentals
• Mixed-use property/vacation home
• Passive loss limitation (e.g., special $25,000 allowance, MAGI limits)
• Rental income (e.g., deposits, pre-paid rent, not rented for profit)
• Rental expenses (e.g., allocation between personal and rental, repair versus capitalized)

Part 3: Representation, paractices and Procedures

Sample Questions

Domain 1: Practices and Procedures (26 Questions)

Practice before the IRS

• What constitutes practice before the IRS
• Categories of individuals who may practice and extent of practice privileges

Requirements for Enrolled Agents

• Information to be furnished to the IRS
• Omission or error on return, document, or affidavit
• Rules for employing or accepting assistance from former IRS employees or disbarred/suspended persons
• Rules for restrictions on advertising, solicitation, and fee information
• Rules regarding fees (e.g., contingent, unconscionable)
• Due diligence requirements
• Conflict of interest
• Rules for refund check negotiation
• Standards for written advice, covered opinions, tax return positions, and preparing returns
• Continuing education requirements
• Enrollment cycle and renewal
• Rules for prompt disposition of matters before the IRS
• Rules for returning a client's records and documents
• PTIN requirements
• Practitioner supervisory responsibilities

Sanctionable Acts

• Incompetence and disreputable conduct
• Sanctions imposed by the Office of Professional Responsibility
• Frivolous submissions (returns and documents)
• Fraudulent transactions (e.g., badges of fraud)

Rules and Penalties

• Assessment and appeal procedures for preparer penalties
• Types of penalties (e.g., negligence, substantial understatement, overvaluation)
• Furnishing a copy of a return to a taxpayer
• Signing returns and furnishing identifying numbers
• Keeping copies or lists of returns prepared
• Employees engaged or employed during a return period (e.g., IRC section 6060)
• Preparer due diligence penalties

Domain 2: Representation before the IRS (25 Questions)

Power of Attorney

• Purpose of power of attorney
• Signature authority (e.g., extension of assessment period, closing agreement)
• Authority granted by taxpayer
• Limitations on signing tax returns on behalf of taxpayer
• Proper completion of power of attorney (Form 2848)
• Alternate forms of power of attorney (durable)
• Rules for client privacy and consent to disclose
• Distinctions between power of attorney (Form 2848) and tax information authorization (Form 8821)
• Requirements to be met when changing or dropping representatives or withdrawal of representative
• Purpose of a Centralized Authorization File (CAF) number
• Conference and practice requirements (Publication 216)

Building the Taxpayer’s Case-Preliminary Work

• Identification of tax issue(s) with supporting details
• Potential for criminal aspects
• Competence, expertise, and time to handle issue
• Conflict of interest in regards to representation
• Transcripts from IRS (e.g., access to and use of e-services)

Taxpayer Financial Situation

• Taxpayer's ability to pay the tax (e.g., installment agreements, offer in compromise, currently not collectible)
• General financial health (e.g., bankruptcy, lawsuits, garnishments, cash flow, assets, and insolvency)
• Third-party research (e.g., property assessment for taxes, asset values, state and local tax information)
• Discharge of the tax liability in bankruptcy
• IRS Collection Financial Standards

Supporting Documentation

• Financial documents and expense records (e.g., cancelled checks or equivalent, bank statements, credit card statements, receipts, brokerage records)
• Legal documents (e.g., birth certificate, divorce decrees, lawsuit settlements)
• Prior and subsequent tax returns
• Other substantive and contemporaneous documentation (e.g., corporate minutes)
• Business entity supporting documents (e.g., partnership agreement, corporate bylaws)

Legal Authority and References

• Internal Revenue Code and income tax regulations
• Revenue rulings and revenue procedures
• Case law
• IRS forms, instructions, and publications
• Private letter ruling
• Internal Revenue Manual
• Authoritative versus non-authoritative source material
• Tax treaties

Related Issues

• Statute of limitations
• Post-filing correspondence (e.g., math error notices, under-reporting notices)
• Deadlines and timeliness requirements
• Third-party correspondence (e.g., witness communications, employment records)
• Freedom of Information Act (FOIA) requests
• Tax avoidance vs tax evasion
• Tax return disclosure statements
• Taxpayer Advocate Service (e.g., criteria for requesting assistance)
• Taxpayer identity Theft
• Judicial levels of representation beyond the scope of EA representation

Domain 3: Specific Areas of Representation (20 Questions)

Representing a Taxpayer in the Collection Process

• Extension of time to pay (e.g., Form 1127)
• Installment agreements
• Offer in compromise
• Collection appeals program (e.g., denial of installment agreements, discharge applications)
• Collection appeals and due process (e.g., lien, levy, and Form 12153)
• Adjustments to the taxpayer’s account (e.g., abatements and refund offsets)
• Requesting an audit reconsideration (e.g., documents and forms)
• Representing a decedent
• Collection notice and Notice of Federal Tax Lien
• Levy and seizure of taxpayer's property
• Currently Not Collectible (e.g., reasons and reactivation)
• IRS Collection Summons (e.g., purposes)
• Collections statute of limitations
• Trust fund recovery penalty
• Amended returns and claims for refund (e.g., Form 1040X, Form 843, effect on statute of limitations)
• Passport revocation

Penalties and/or Interest Abatement

• Penalties subject to abatement
• Basis for having penalties abated or refunded
• Basis for having interest abated or refunded
• Interest recalculation
• Procedures for requesting abatement

Representing a Taxpayer in Audits/Examinations

• IRS authority to investigate
• Limited practitioner privilege (e.g., IRC section 7525)
• Verification and substantiation of entries on the return
• IRS authority to fix time and place of investigation
• Steps in the process (e.g., initial meeting, submission of IRS requested information)
• Interpretation and analysis of revenue agent report (RAR) (e.g., 30-day letter)
• Interpretation and analysis of CP-2000 notice and correspondence audits
• Explanations of taxpayer options (e.g., agree or appeal)
• Taxpayer’s burden of proof

Representing a Taxpayer before Appeals

• Right to appeal Revenue Agent findings
• Request for appeals consideration (e.g., preparation, elements contained)
• Enrolled Agent appearance at appeals conference
• Settlement function of the appeals process
• Issuance of 90-day letter

Domain 4: Filing Process (14 Questions)

Accuracy

• Reliance on software (e.g., review of results)
• Miscalculations and recognition of duplicate entries

Record Maintenance

• Length of time to retain returns and records
• Data security (e.g., electronic, systems, paper)

Electronic Filing

• Application process to be an e-file provider (e.g., e-services, EFIN)
• E-file mandate and exceptions (Form 8948)
• Advertising standards
• Definition and responsibilities of an ERO
• Levels of infractions
• Compliance requirements to continue in program
• EFIN revocation appeal process
• E-file authorization and supporting documentation (e.g., Form 8879 and Form 8453)
• Rejected returns and resolution (e.g., client notification, IP PIN)