IRS ENROLLED AGENT EXAMINATION - Dynasty School

424 Pages·2003·4.86 MB·English

IRS ENROLLED AGENT EXAMINATION
INTRODUCTION AND TIPS

INTRODUCTION AND Q & A's

The Internal Revenue Service Special Enrollment Examination is offered Once each year for individuals
who wish to be enrolled to practice before the Internal Revenue Service (Enrolled Agents). It is comprised
of four parts. Candidates must take all four parts of the examination in the first year. Those who pass at
least one part of the examination in the first year may take the failed parts in the following three years with
these provisions:

Candidates must achieve the minimum retention score on EACH part failed in the first year. The minimum
retention score is 90 percent of the passing score set for the part(s) failed.

Candidates MUST take ALL failed parts of the examination in the second year, all remaining parts the
third year, and all remaining parts the fourth year.

Candidates must achieve a score no less than 90 percent of the passing score for any parts taken in the
second and third years in order to remain eligible to try again. That is to say that if you score below the
minimum retention score on any part taken in the second or third year, you would be required to retake
the examination in its entirety should you wish to continue.

Candidates who do not pass all four parts of the examination by the end of the fourth year must start over
again.

Candidates who pass three of the four parts the first year do NOT have to achieve the minimum retention
score on the part failed. Therefore, they would be required to take only the part failed the following year.

IMPORTANT DATES

Exam Applications available from IRS call 800-829-3676 June 1
Deadline to submit exam applications to IRS July 31

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IRS ENROLLED AGENT EXAMINATION
INTRODUCTION AND TIPS

Questions & Answers

Question: If an individual is unable to retake the examination in a subsequent year, would he/ she
lose credit for examination parts passed?

Answer: Yes, in most cases, since the examination assumes continuity. However, if the candidate
is able to give compelling reasons for a waiver, e.g. serious illness or a death in the family, it could be
granted.

Question: In the above situation, does the candidate still have only four years to complete the
examination successfully or is the candidate allowed additional years?

Answer: The years a candidate misses taking the examination under a waiver will not count
against the four years. Each waiver would extend the period one year. However, there is a six year
[imitation. That is, the candidate must complete the examination successfully within six years if granted
any waiver, including years for which waivers are granted.

Question: May an individual change the district in which he/she takes the examination from year to
year?

Answer: Yes.

Question: Would an individual who passed one or more parts of the examination in the first year and
again failed the parts he/she had to take in the second year be able to carry over first year credit?

Answer: Yes. The candidate would retain credit for any part passed iii the first year for the remaining
three years, provided he/she met the minimum retention score and parts required to be taken conditions
as set forth above.

Question: What if an individual took all four parts of the examination in 1996 and did not pass any of
the four parts?

Answer: The four year requirement does not take effect until the candidate passes at least one part
of the examination.

Question: May an individual take one part of the examination per year for four years?

Answer: No. Candidates must take all four parts the first year, all failed parts the second year, all
remaining failed parts in the third year, and all remaining failed parts in the fourth year.

Question: How many years may an individual take the examination without passing at least one
part?

Answer: There is no limit.

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IRS ENROLLED AGENT EXAMINATION
INTRODUCTION AND TIPS

TIPS TO PASS THE EXAM

(cid:139) Because the tax information is enormous, so we have extracted the key points relating to the
examination together with "exercises" to form a four-part WORKBOOK. We recommend you study
the WORKBOOK and the PAST IRS EXAMINATIONS AND QUESTIONS we supplied to you. You
do not need to study all the IRS publications (SEE Package), you should use them as the
indispensable references.

(cid:139) Use the enclosed Special Enrollment Examination (SEE) Study Material Request and Mailing Label
attached to order your IRS publications. (next page)

(cid:139) Study the important Q-Cards (index cards) we prepared for you. These index cards contain the key
information on topics relating to the IRS EA exam.

(cid:139) You are not allowed to bring a calculator into the exam, so practice those computation questions by
hand.

(cid:139) Pay more attentions to the computational questions in Section C first. These questions are worth 3
points each and it is important you finish them first. Answer the TRUE/FALSE questions (Section
A)) last, because they are worth one point each and you have a 50% chance of picking the right
answer.

(cid:139) Many of the questions on Part 4 can be answered using common sense. The IRS likes to ask a few
esoteric questions that will not be familiar to you. Read the questions carefully, if the question
sounds like it makes sense, mark true.

(cid:139) Most of the true questions in Section A are statements right out of the IRS publications, IRC code,
or regulations. Make sure you memorize all those true questions. On the last five year's exams if
you had answered true to every questions on Section A, you would have passed that section of the
exam.

Do NOT attempt to learn every specific details of the tax law. You cannot. We have designed this course
to give you "enough" tax information to pass all four parts of the exam the first time. The passing grade
for last five years exams were between 50% to 58%.

We have prepared you to pass the exam. The rest is on your hands.

GOOD LUCK TO YOUR EXAM & BEST WISHES TO YOUR CARRIER AS AN EA.

Dynasty School

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IRS ENROLLED AGENT EXAMINATION
INTRODUCTION AND TIPS

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IRS ENROLLED AGENT EXAMINATION
INTRODUCTION AND TIPS

Special Enrollment Examination (SEE)
Study Material-Request and Mailing Label

You may request the SEE Kit by internet: www.irs.gov/pub/irs-fill/f2587.pdf or you may order, free of
charge, the IRS publications which provide much of the basic information to assist you in the preparation
for the examination. In addition, IRS produces most of the information included in the SEE kit
electronically on “The Federal Tax Products” CD-ROM (Publication 1796).

(cid:137) Electronic or CD-ROM (publication 1796) Version of the 2001 See Kit Study Material (plus the Printed
Copy Version of Items not included on the CD-ROM).

(cid:137) Please send me the printed Version of SEE kit Study Material and CD-ROM ROM Publication 1796.

Please complete the lower portion of this page and mail it to the address listed below. Please print “SEE “
in the lower left front corner of your envelope. (Please do not send this form with your application Form
2587)

Send to: IRS Western Area Distribution Center Rancho Cordova,. CA. 95743-0001

Return label - Fill in your name and address below.

Please expedite shipment of the Special Enrollment Examination Study Material to:

SEE Study Material Pamphlet

Name

Street

City State Zip

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IRS ENROLLED AGENT WORK BOOK

PART 1 - INDIVIDUALS

1. PART 1 - INDIVIDUALS
TABLE OF CONTENTS

1. PART 1................................................................................................................1-1
INTRODUCTION.......................................................................................................1-3
PART 1 - THE INCOME TAX RETURN....................................................................1-4
1. Filing Requirements .........................................................................................1-4
2. Filing Status....................................................................................................1-10
3. Personal Exemptions and Dependents..........................................................1-14
4. Decedent's Return..........................................................................................1-19
5. Estimated Tax................................................................................................1-20
PART 2 – INCOME.................................................................................................1-23
6. Accounting......................................................................................................1-23
7. Wages, Salaries, and Other Earnings............................................................1-24
8. Tip Income......................................................................................................1-29
9. Interest Income...............................................................................................1-30
10. Dividends and Other Corporate Distributions.................................................1-37
11. Rental Income and Expenses.........................................................................1-41
12. Social Security and Equivalent Railroad Retirement Benefits........................1-49
13. Other Income..................................................................................................1-50
PART 3 - GAINS AND LOSSES..............................................................................1-55
14. Basis of Property............................................................................................1-55
15. Sales and Trades...........................................................................................1-67
16. Reporting Gains and Losses..........................................................................1-75
17. Selling Your Home (Pub. 523)........................................................................1-91
PART 4 - ADJUSTMENTS, DEDUCTIONS, CREDITS AND TAXES....................1-103
18. Individual Retirement Arrangements (IRAs).................................................1-103
19. Moving Expenses.........................................................................................1-118
20. Alimony ........................................................................................................1-120
PART 5 - STANDARD DEDUCTION AND ITEMIZED DEDUCTIONS..................1-123
21. Standard Deduction......................................................................................1-123
22. Limit on Itemized Deductions (Pub. 17)........................................................1-123
23. Medical and Dental Expenses......................................................................1-124
24. Taxes ...........................................................................................................1-129
25. Interest Expense..........................................................................................1-131
26. Contributions................................................................................................1-133
27. Nonbusiness Casualty and Theft Losses.....................................................1-138
28. Travel, Transportation, and Other Employee Business Expense.................1-140
29. Employee's Educational Expenses...............................................................1-152

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IRS ENROLLED AGENT WORK BOOK
PART 1 - INDIVIDUALS

30. Miscellaneous Deductions............................................................................1-154
PART 6 - FIGURING YOUR TAXES AND CREDITS............................................1-158
31. How To Figure Your Tax..............................................................................1-158
32. Tax on Investment Income of Certain Minor Children ..................................1-160
33. Child and Dependent Care Credit ................................................................1-161
34. Credit for the Elderly and Disabled...............................................................1-164
35. Child Tax Credit............................................................................................1-165
36. Education Credits.........................................................................................1-166
37. Earned Income Credit (EIC).........................................................................1-169
38. Other Credits................................................................................................1-173

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