IRS Enrolled Agent (Representation) (SEE Part 3) Practice Questions & Study Guide
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Question 1
Maria is a bookkeeper who prepared a client's federal income tax return. The IRS has issued a notice of examination for that return. Under Circular 230, what is the extent of Maria's authority to represent the client before the IRS?
- A. Maria may represent the client fully because she prepared the return and has firsthand knowledge of its contents.
- B. Maria may represent the client only before a Revenue Agent during the examination of that specific return she prepared.
- C. Maria has no authority to represent the client because unenrolled preparers lost all representation rights after 2016.
- D. Maria may represent the client only if she obtains a one-time waiver from the Office of Professional Responsibility.
Correct Answer:
B
Explanation:
Option B is correct. Under Circular 230, unenrolled preparers like Maria retain limited representation rights specifically before a Revenue Agent examining the return they prepared.
Reason
Under Circular 230 § 10.3(f) and the IRS's unenrolled preparer representation rules, a person who prepared a tax return but is not an enrolled agent, CPA, or attorney may represent the taxpayer only before examination officers (Revenue Agents) during an examination of the specific return they prepared. This limited right was preserved after the 2016 regulatory changes, though it does not extend to appeals, collection matters, or other IRS functions. Maria's authority is thus narrowly scoped to the examination of that particular return and only before the Revenue Agent assigned to it.
Why the other options are not as suitable
- Option A is wrong because familiarity with a return does not confer unlimited representation rights; Circular 230 imposes strict credential-based limitations on who may practice fully before the IRS.
- Option C is wrong because unenrolled preparers did NOT lose all representation rights in 2016; they retained the limited right to represent clients before Revenue Agents during examination of returns they personally prepared.
- Option D is wrong because no 'one-time waiver' mechanism through the Office of Professional Responsibility exists for unenrolled preparers to expand their representation authority; the OPR governs practitioner conduct and discipline, not ad hoc waivers of practice scope.
Citations
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Question 2
Which of the following individuals has UNLIMITED practice rights before the IRS, meaning they may represent any client on any federal tax matter before any IRS office without restriction?
- A. An Annual Filing Season Program (AFSP) record-of-completion holder who has not opted in to limited representation rights.
- B. A registered tax return preparer who passed the IRS competency examination prior to its suspension.
- C. An Enrolled Agent who is in active status and has fulfilled all continuing education requirements.
- D. A CPA whose CPA license has lapsed but who continues to prepare returns professionally.
Correct Answer:
C
Explanation:
Option C is correct. An Enrolled Agent in active status with current continuing education fulfillment holds unlimited practice rights before the IRS under Circular 230.
Reason
Under Circular 230 § 10.3(a)-(b), Enrolled Agents (EAs), attorneys, and CPAs in good standing are the three categories afforded unlimited representation rights before all IRS offices on any federal tax matter for any client. An EA in active enrollment status who has satisfied the 72-hour triennial continuing education requirement (including ethics) is fully authorized without restriction as to subject matter, client type, or IRS function (examination, appeals, collection, etc.).
Why the other options are not as suitable
- Option A is wrong because AFSP record-of-completion holders who have opted in receive only limited representation rights (similar to unenrolled preparers before Revenue Agents during examination), not unlimited rights; opting in does not elevate them to unlimited practitioner status.
- Option B is wrong because the Registered Tax Return Preparer (RTRP) program was enjoined by federal courts and never conferred unlimited practice rights; the IRS competency exam associated with RTRP is suspended and RTRP status does not exist as a recognized Circular 230 credential.
- Option D is wrong because a CPA whose license has lapsed is no longer in good standing with their state licensing authority, and Circular 230 § 10.3(b) requires that the CPA license be active and valid; a lapsed license disqualifies the individual from practicing before the IRS as a CPA.
Citations
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Question 3
Attorney Carlos is licensed to practice law in Texas but not in California. His California-based client receives an IRS collection notice. Under Circular 230, which statement BEST describes Carlos's authority to represent this client before the IRS?
- A. Carlos may not represent the client because he is not licensed in the state where the client resides.
- B. Carlos may represent the client in all IRS matters because Circular 230 practice rights are federal and not state-dependent.
- C. Carlos may represent the client only if he first obtains a California pro hac vice admission.
- D. Carlos may represent the client only with written consent from the California State Bar.
Correct Answer:
B
Explanation:
Option B is correct. Circular 230 practice rights are governed by federal law, and an attorney licensed in any U.S. state or jurisdiction may represent clients before the IRS regardless of the client's state of residence.
Reason
Under Circular 230 § 10.3(a), any individual who is a member in good standing of the bar of the highest court of any state, U.S. territory, or the District of Columbia may practice before the IRS without limitation. The IRS is a federal agency, and representation before it is a federal practice right, entirely independent of which state the client resides in or where the attorney is licensed. Carlos's Texas bar membership is fully sufficient to authorize his representation of a California-based client in an IRS collection matter.
Why the other options are not as suitable
- Option A is wrong because Circular 230 contains no requirement that an attorney be licensed in the same state as the client; the attorney need only be licensed in good standing in any state bar, and the IRS is a federal — not state — forum.
- Option C is wrong because pro hac vice admission is a state court procedural mechanism for out-of-state attorneys to appear in state court proceedings; it has no application to IRS administrative proceedings, which are governed exclusively by federal rules under Circular 230.
- Option D is wrong because the California State Bar has no authority to grant or withhold permission for a licensed out-of-state attorney to represent a client before the IRS; IRS representation authority derives solely from Circular 230 and federal law, not from any state bar's consent.
Citations
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Question 4
A taxpayer's neighbor is a retired IRS Revenue Officer with no professional tax license. The taxpayer asks the neighbor to accompany them and speak on their behalf at an IRS Taxpayer Assistance Center meeting. Under Circular 230, the neighbor may do so only if:
- A. The neighbor files Form 2848 listing themselves as a non-credentialed representative.
- B. The neighbor qualifies as an 'unenrolled individual' representing an immediate family member, employer, or is specifically authorized under a statutory exception.
- C. The IRS Revenue Agent assigned to the case provides written pre-approval.
- D. The neighbor registers with the Office of Professional Responsibility at least 30 days in advance.
Correct Answer:
B
Explanation:
Option B is correct. Under Circular 230, an unenrolled individual may represent a taxpayer before the IRS only in limited, specifically enumerated circumstances, and a retired IRS employee with no current license does not have blanket representation rights.
Reason
Under Circular 230 §10.7(c), individuals who are not enrolled agents, CPAs, or attorneys may nonetheless represent taxpayers before the IRS in narrow statutory exceptions — including representing an immediate family member, acting as a full-time employer's representative, serving as a fiduciary (trustee, executor, etc.), or appearing under a specific IRS-authorized program such as the Annual Filing Season Program (AFSP) with limited representation rights. A retired IRS Revenue Officer who holds no current professional license is an 'unenrolled individual' and may only speak on a taxpayer's behalf if one of these enumerated exceptions applies. Mere prior employment by the IRS confers no ongoing representation privilege under Circular 230.
Why the other options are not as suitable
- Option A is wrong because Form 2848 (Power of Attorney and Declaration of Representative) requires the representative to qualify under one of the recognized categories listed in its instructions (attorney, CPA, enrolled agent, enrolled actuary, ERPA, unenrolled return preparer with AFSP, etc.); an unqualified neighbor cannot simply self-designate as a 'non-credentialed representative' and file a valid Form 2848.
- Option C is wrong because no provision of Circular 230 or IRS procedure grants a Revenue Agent assigned to a case the authority to pre-approve a taxpayer's choice of non-credentialed representative; representation rights are governed by statute and regulation, not case-by-case agent approval.
- Option D is wrong because there is no 30-day advance registration requirement with the Office of Professional Responsibility (OPR) for unenrolled individuals; the OPR oversees discipline of practitioners under Circular 230 and does not operate a pre-approval registry for neighbors or other non-practitioners.
Citations
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Question 5
Jennifer is a CPA licensed in good standing in Oregon. She has a client whose offer in compromise was rejected and the client wishes to appeal to the IRS Independent Office of Appeals. Under Circular 230, Jennifer:
- A. May represent the client at Appeals only if she is also an Enrolled Agent, because Appeals is considered a higher-level proceeding.
- B. May represent the client at Appeals because CPAs have unlimited representation rights before all IRS offices including Appeals.
- C. May represent the client at Appeals only after passing the IRS Appeals officer certification examination.
- D. May represent the client at Appeals only with the co-signature of a licensed attorney on all filed documents.
Correct Answer:
B
Explanation:
Option B is correct. CPAs licensed in good standing in any state possess unlimited practice rights before all offices of the IRS, including the Independent Office of Appeals, under Circular 230.
Reason
Under Circular 230 §10.3(b), a Certified Public Accountant (CPA) who is duly qualified to practice in any state is authorized to practice before the IRS, which includes representing clients before all IRS offices and functions — examination, collection, and Appeals. The IRS Independent Office of Appeals is an IRS office, and there is no tiered credentialing system requiring an additional designation beyond CPA (or attorney or enrolled agent) to appear there. Jennifer's Oregon CPA license in good standing fully satisfies Circular 230's requirements for unlimited representation rights.
Why the other options are not as suitable
- Option A is wrong because Circular 230 does not create a hierarchy whereby Appeals requires an Enrolled Agent credential over and above a CPA license; both enrolled agents and CPAs enjoy the same unlimited practice rights before all IRS offices, including Appeals.
- Option C is wrong because there is no 'IRS Appeals officer certification examination' that CPAs, attorneys, or enrolled agents must pass; such an examination does not exist under Circular 230 or any IRS regulation.
- Option D is wrong because Circular 230 imposes no requirement that a CPA obtain a co-signature from a licensed attorney on documents filed in Appeals proceedings; CPAs may act as the sole authorized representative without any attorney involvement.
Citations
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Question 6
An Enrolled Retirement Plan Agent (ERPA) is best described under Circular 230 as a practitioner who:
- A. Has unlimited practice rights before the IRS identical to those of an Enrolled Agent.
- B. May practice before the IRS only with respect to retirement plan matters, such as those handled by the Employee Plans function.
- C. Is authorized solely to prepare Form 5500 series returns and has no representation rights.
- D. May represent taxpayers in all IRS collection matters relating to retirement plan distributions.
Correct Answer:
B
Explanation:
Option B is correct. An Enrolled Retirement Plan Agent (ERPA) holds limited practice rights confined to retirement plan matters before specific IRS functions, and does not have the same broad, unlimited practice rights as an Enrolled Agent.
Reason
Under Circular 230 §10.3(e), an Enrolled Retirement Plan Agent (ERPA) is a practitioner who has passed a special IRS enrollment examination focused on retirement plan issues and is authorized to represent taxpayers only before the Employee Plans (EP) function of the Tax Exempt and Government Entities Division, as well as before the IRS Office of Customer Account Services and the Office of Governmental Liaison with respect to retirement plan matters. This is a limited practice right — more expansive than simply preparing returns, but narrower than the unlimited rights of an Enrolled Agent, CPA, or attorney.
Why the other options are not as suitable
- Option A is wrong because ERPAs do not have unlimited practice rights identical to Enrolled Agents; Circular 230 explicitly limits ERPA practice to retirement plan matters before designated IRS functions, whereas Enrolled Agents may represent taxpayers before any IRS office on any tax matter.
- Option C is wrong because ERPAs are not limited solely to preparing Form 5500 series returns; they have actual representation rights (i.e., the ability to advocate and speak on behalf of taxpayers) before the Employee Plans function and related offices, which goes beyond mere return preparation.
- Option D is wrong because ERPAs are not authorized to represent taxpayers in all IRS collection matters relating to retirement plan distributions; their authority is confined to the Employee Plans function and specified retirement plan proceedings, not general collection division matters such as CDP hearings or levy actions.
Citations
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Question 7
Which of the following individuals is PROHIBITED from representing a taxpayer before the IRS even at the examination level, regardless of the circumstances?
- A. An unenrolled preparer who signed the tax return under examination but did not complete the AFSP.
- B. A CPA candidate who has passed all four sections of the CPA exam but has not yet received their license.
- C. An attorney who was disbarred by the state bar and whose Circular 230 enrollment was subsequently revoked by OPR.
- D. A corporate officer representing their own corporation's tax matter before a Revenue Agent.
Correct Answer:
C
Explanation:
Option C is correct. An individual whose Circular 230 enrollment has been revoked by the Office of Professional Responsibility (OPR) is categorically and permanently prohibited from practicing before the IRS until and unless reinstatement is granted — there are no circumstantial exceptions.
Reason
Under Circular 230 §10.7 and §10.79, individuals whose right to practice before the IRS has been revoked by the OPR are barred from all levels of IRS representation, including examination. A disbarred attorney who subsequently had their Circular 230 enrollment revoked has lost both their state professional credential and their federal practice privilege, leaving no pathway for representation under any exception. Unlike unenrolled preparers or unlicensed individuals who may have limited or conditional access, a formally revoked practitioner faces an absolute prohibition with no carve-out for examination-level or any other level of representation.
Why the other options are not as suitable
- Option A is wrong because an unenrolled return preparer who signed the return under examination retains limited examination-level representation rights under Circular 230 §10.7(c)(1)(viii) even without completing the Annual Filing Season Program (AFSP), though AFSP completion expands those rights.
- Option B is wrong because a CPA candidate who has passed all four exam sections but has not yet received licensure is not an enrolled agent, CPA, or attorney under Circular 230 §10.3, but they may still represent themselves or qualify under limited non-practitioner rules; they are not categorically prohibited in the same absolute manner as a revoked practitioner.
- Option D is wrong because a corporate officer representing their own corporation's tax matters is expressly permitted under Circular 230 §10.7(c)(1)(vi) as a non-attorney/non-CPA who may appear on behalf of their own organization without being a credentialed practitioner.
Citations
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Question 8
David passed the Special Enrollment Examination (SEE) three years ago but never submitted Form 23 to apply for enrollment. He now wants to represent a client before the IRS Appeals Office. Under Circular 230, David:
- A. May represent the client because passing the SEE is the operative credential; enrollment paperwork is merely administrative.
- B. May represent the client at Appeals only if he submits Form 23 within 30 days of the representation date.
- C. May not represent the client as an Enrolled Agent because official enrollment is granted only upon approval of Form 23 by the IRS, not upon passing the SEE alone.
- D. May represent the client under the unenrolled preparer rules because he has demonstrated competency by passing the SEE.
Correct Answer:
C
Explanation:
Option C is correct. Passing the SEE is a prerequisite for enrollment, not enrollment itself; official status as an Enrolled Agent is conferred only when the IRS approves the candidate's Form 23 (Application for Enrollment).
Reason
Under Circular 230 §10.4(b), an individual becomes an Enrolled Agent only after the IRS reviews and approves Form 23, which includes a suitability check (tax compliance and background review). Passing the SEE demonstrates competency but does not itself grant the right to practice — it merely makes the applicant eligible to apply. Because David never submitted Form 23, he has never been granted enrolled agent status and therefore has no authority to represent clients before the IRS Appeals Office, which requires full practitioner credentials under Circular 230 §10.3(a).
Why the other options are not as suitable
- Option A is wrong because the SEE is a competency examination, not a license; the operative credential is the IRS-approved enrollment memorialized in Form 23 approval, and treating exam passage as sufficient ignores the mandatory suitability review.
- Option B is wrong because Circular 230 contains no provision allowing a 30-day grace period to submit Form 23 retroactively to cure an ongoing unauthorized representation; no such grace period exists under §10.4(b) or any related regulation.
- Option D is wrong because the unenrolled preparer rules under §10.7(c)(1)(viii) apply to individuals who prepared and signed the specific return under examination — David's situation involves Appeals representation of a client, not examination of a return he prepared, so that limited exception is wholly inapplicable.
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Question 9
Under Circular 230, a practitioner who discovers that a client made a material error on a prior year's federal tax return is required to:
- A. Immediately file an amended return on the client's behalf without obtaining the client's consent.
- B. Promptly notify the client of the error and the potential consequences, but may not unilaterally file an amended return.
- C. Report the error directly to the IRS Office of Professional Responsibility within 30 days of discovery.
- D. Withdraw from representation immediately and report the error to the IRS on Form 8275.
Correct Answer:
B
Explanation:
Option B is correct. Under Circular 230, a practitioner who discovers a client's prior-year error must promptly notify the client of the error and its consequences but is explicitly prohibited from unilaterally filing an amended return without the client's authorization.
Reason
Under Circular 230 §10.21, a practitioner who knows that a client has made an error or omission in a return or other document filed with the IRS must promptly advise the client of the error and the potential consequences of not correcting it. However, the same provision makes clear that the practitioner may not unilaterally correct the error by filing an amended return — that decision belongs exclusively to the client. This framework respects client autonomy while ensuring the practitioner fulfills their duty of candid advice.
Why the other options are not as suitable
- Option A is wrong because Circular 230 §10.21 expressly prohibits a practitioner from taking unilateral corrective action such as filing an amended return without the client's consent and direction; doing so would violate both the client's autonomy and the practitioner's authority limits.
- Option C is wrong because §10.21 imposes no duty to report the client's error directly to the IRS or to OPR — the duty runs to the client, not to the IRS, and there is no 30-day reporting deadline imposed on the practitioner for a client's prior-year error.
- Option D is wrong because mandatory withdrawal is not required solely because a client error is discovered, and Form 8275 (Disclosure Statement) is used to disclose positions on current returns to avoid accuracy-related penalties — it is not a mechanism for reporting a discovered prior-year error to the IRS, nor does Circular 230 require its use in this context.
Citations
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Question 10
Circular 230 prohibits a practitioner from charging a contingent fee for preparing or filing an original federal income tax return. Which of the following situations represents a PERMISSIBLE contingent fee arrangement under Circular 230?
- A. A fee equal to 15% of any refund generated on a client's original Form 1040 filing.
- B. A fee equal to 20% of the additional refund obtained through an IRS examination of the client's already-filed return.
- C. A fee based on a percentage of the gross income reported on a client's Schedule C.
- D. A flat fee that doubles if the client receives a refund exceeding $5,000 on an original return.
Correct Answer:
B
Explanation:
Option B is correct. Under Circular 230 §10.27, a contingent fee is permissible when it relates to an IRS examination or challenge of an already-filed return, not the preparation of an original return.
Reason
Circular 230 §10.27(b)(2) explicitly carves out an exception allowing contingent fees for services rendered in connection with an IRS examination or audit of an original return that has already been filed. In Option B, the fee is tied to an additional refund obtained through an IRS examination of a return the client previously filed — this falls squarely within the permitted exception. The key distinction is that the practitioner is not preparing or filing an original return; rather, they are representing a client in an adversarial or administrative proceeding before the IRS after the original filing is complete.
Why the other options are not as suitable
- Option A is wrong because a fee equal to 15% of any refund generated on a client's original Form 1040 filing is a classic prohibited contingent fee arrangement tied directly to the preparation and filing of an original return, which Circular 230 §10.27(a) expressly forbids.
- Option C is wrong because a fee based on a percentage of gross income reported on Schedule C is a contingent arrangement linked to the content and outcome of an original return filing, which is similarly prohibited under §10.27(a) regardless of how the percentage basis is framed.
- Option D is wrong because a flat fee that doubles upon a refund exceeding $5,000 on an original return is functionally a contingent fee — it is conditioned on a particular outcome of the original return — and therefore violates §10.27(a)'s prohibition on outcome-based fees for original filings.
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About This Practice Material
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