IRS Special Enrollment Examination (SEE) New 2026
Latest Version with All the 100 Questions for Part 3,
100% Correct Answers and Rationale
SECTION A: PRACTICES AND PROCEDURES / CIRCULAR 230 (Questions 1-25)
Question 1
Under Treasury Department Circular No. 230, which of the following is incompetence or disreputable
conduct?
A. Conviction of any misdemeanor offense under Federal, State, or local law
B. Conviction of any criminal offense involving dishonesty or breach of trust
C. Willfully disclosing a taxpayer's tax return information with the consent of the taxpayer
D. Due to reasonable cause, forgetting to sign a tax return prepared by the practitioner when the
practitioner's signature is required by Federal tax laws
Correct Answer: B
Rationale: Circular 230, Section 10.51 defines incompetence and disreputable conduct. Conviction of
any criminal offense involving dishonesty or breach of trust is specifically listed as disreputable conduct.
Willful disclosure with taxpayer consent is permitted, and a single instance of forgetting to sign due to
reasonable cause is not necessarily disreputable conduct .
Question 2
Which of the following from Circular 230 is correct regarding sanctions against an enrolled agent (EA)?
A. There cannot be both monetary and nonmonetary sanctions imposed
B. An EA can face imprisonment up to 3 years
C. An EA can be censured
D. A monetary penalty can exceed the gross income derived from the conduct giving rise to the penalty
Correct Answer: C
Rationale: Circular 230, Section 10.50 provides that an enrolled agent can be censured, suspended, or
disbarred from practice before the IRS. Both monetary and nonmonetary sanctions can be imposed
simultaneously, and monetary penalties are generally limited to the gross income derived from the
conduct .
Question 3
What information does a preparer need to maintain for each return prepared?
A. The taxpayer's name only
B. The taxpayer's name and tax ID number only
C. The taxpayer's name, tax ID number, taxable year, name of the preparer, and type of return prepared
D. Only a copy of the signed return
Correct Answer: C
Rationale: A preparer must maintain the taxpayer's name, tax ID number, taxable year of the taxpayer,
name of the preparer, and the type of return or claim for refund prepared. This documentation requirement
ensures proper recordkeeping for all returns prepared .
Question 4
Circular 230, Section 10.22 requires a practitioner to exercise due diligence. Except as provided in Sec
10.34 and 10.37, a practitioner will be presumed to have exercised due diligence if the practitioner relies
on:
A. Information received from the IRS taxpayer hotline
,B. Information received from the IRS practitioner hotline
C. The work product of another person and the practitioner used reasonable care in engaging, supervising,
training, and evaluating the person
D. Information obtained on the Internet
Correct Answer: C
Rationale: A practitioner is presumed to have exercised due diligence if they rely on the work product of
another person and used reasonable care in engaging, supervising, training, and evaluating that person,
taking proper account of the nature of the relationship between the practitioner and the person .
Question 5
How many future years will the IRS record to the Centralized Authentication File (CAF) at the taxpayer's
request based on receipt of a valid Form 2848 authorizing representation for tax years or periods?
A. December 31 of year of receipt + 1 year
B. December 31 of year of receipt + 2 years
C. December 31 of year of receipt + 3 years
D. December 31 of year of receipt + 4 years
Correct Answer: C
Rationale: According to 26 C.F.R. § 601.506(d)(3)(ii) and the instructions for Form 2848, the IRS will
record representation authorization to the CAF for up to 3 years from December 31 of the year the form is
received .
Question 6
To meet due diligence requirements for the Earned Income Credit, which of the following is true
regarding the Earned Income Credit Worksheet and Form 8867?
A. A record must be kept of how, when, and from whom the information used to prepare the Form 8867
and the Worksheets was obtained
B. Form 8867 does not need to be filed with the return if all information used to complete the form was
provided by the taxpayer in writing
C. A record of any questions the taxpayer may have asked the tax preparer about their eligibility for the
credits should be retained
D. Copies of documents provided by the taxpayer that the return preparer relied on to determine the
eligibility for the credits do not need to be retained by the preparer
Correct Answer: A
Rationale: Treasury Regulation § 1.6695-2(b) and the Instructions for Form 8867 require preparers to
maintain records of how, when, and from whom information used to prepare Form 8867 and the
worksheets was obtained. Form 8867 must be filed with the return, and copies of supporting documents
must be retained .
Question 7
In preparing an Earned Income Credit Worksheet and Form 8867, to meet the due diligence requirements,
a return preparer must retain for a certain period all of the following EXCEPT:
A. A record of from whom the information used to prepare the Form 8867 and the worksheets was
obtained
B. A copy of the Form 8867
C. A record of any questions the taxpayer may have asked the tax preparer about their eligibility for the
credits
D. Copies of documents provided by the taxpayer that the return preparer relied on to determine the
eligibility for the credits
Correct Answer: C
Rationale: The due diligence requirements require retention of: a copy of Form 8867; applicable
worksheets; copies of documents relied upon; a record of how, when, and from whom information was
, obtained; and a record of any additional questions THE TAX PREPARER (not the taxpayer) may have
asked. Questions asked by the taxpayer are not specifically required to be retained .
Question 8
A taxpayer filed an appeal of an IRS examination and then signed Form 8821, Tax Information
Authorization, authorizing an enrolled agent (EA) to receive the taxpayer's confidential tax information
related to the matter before the Independent Office of Appeals. Which of the following is correct
regarding the EA's ability to represent the taxpayer regarding the appeal?
A. The EA may represent the client based on the Form 8821
B. The EA may represent the client with the oral consent of the client
C. The EA may represent the client with a note attached to Form 8821
D. The EA may not represent the client based on the Form 8821
Correct Answer: D
Rationale: Form 8821 (Tax Information Authorization) only allows the designee to inspect and receive
confidential tax information. It does NOT authorize representation before the IRS. Representation
requires Form 2848 (Power of Attorney and Declaration of Representative) .
Question 9
What level of authority is needed for a tax return preparer to avoid an unreasonable position penalty on a
tax return if the position was not disclosed and is not a tax shelter or reportable transaction?
A. There is or was substantial authority for the position
B. There is reasonable basis for the position
C. The position would more likely than not be sustained on its merits
D. There is a 1-in-3, or greater, likelihood of being sustained on its merits
Correct Answer: A
Rationale: For the general category where a position is not disclosed, the preparer penalty under Section
6694(a) is avoided if there is or was substantial authority for the position. Reasonable basis applies only
to disclosed positions, and the more-likely-than-not standard applies to tax shelters .
Question 10
An enrolled agent's written communications with a client may be privileged under IRC Section 7525 if
they concern:
A. A criminal tax investigation
B. Preparing the client's tax return
C. Representing the client in an IRS examination
D. Encouraging the client to participate in a tax shelter
Correct Answer: C
Rationale: IRC Section 7525 extends a limited confidentiality privilege to tax practitioners for
communications regarding tax advice, but only in non-criminal matters before the IRS. The privilege does
NOT apply to tax return preparation or criminal investigations, and tax shelters are specifically excluded .
Question 11
When advertising their services, an enrolled agent may use which one of the following phrases to describe
their professional designation?
A. Certified to practice before the Internal Revenue Service
B. Admitted to practice before the Internal Revenue Service
C. Enrolled as a representative of the Internal Revenue Service
D. Licensed to practice before the Internal Revenue Service
Correct Answer: B
Rationale: Circular 230, Section 10.30(a)(1) specifically permits enrolled agents to use the phrase
"admitted to practice before the Internal Revenue Service" in their advertising. Other phrases implying
Latest Version with All the 100 Questions for Part 3,
100% Correct Answers and Rationale
SECTION A: PRACTICES AND PROCEDURES / CIRCULAR 230 (Questions 1-25)
Question 1
Under Treasury Department Circular No. 230, which of the following is incompetence or disreputable
conduct?
A. Conviction of any misdemeanor offense under Federal, State, or local law
B. Conviction of any criminal offense involving dishonesty or breach of trust
C. Willfully disclosing a taxpayer's tax return information with the consent of the taxpayer
D. Due to reasonable cause, forgetting to sign a tax return prepared by the practitioner when the
practitioner's signature is required by Federal tax laws
Correct Answer: B
Rationale: Circular 230, Section 10.51 defines incompetence and disreputable conduct. Conviction of
any criminal offense involving dishonesty or breach of trust is specifically listed as disreputable conduct.
Willful disclosure with taxpayer consent is permitted, and a single instance of forgetting to sign due to
reasonable cause is not necessarily disreputable conduct .
Question 2
Which of the following from Circular 230 is correct regarding sanctions against an enrolled agent (EA)?
A. There cannot be both monetary and nonmonetary sanctions imposed
B. An EA can face imprisonment up to 3 years
C. An EA can be censured
D. A monetary penalty can exceed the gross income derived from the conduct giving rise to the penalty
Correct Answer: C
Rationale: Circular 230, Section 10.50 provides that an enrolled agent can be censured, suspended, or
disbarred from practice before the IRS. Both monetary and nonmonetary sanctions can be imposed
simultaneously, and monetary penalties are generally limited to the gross income derived from the
conduct .
Question 3
What information does a preparer need to maintain for each return prepared?
A. The taxpayer's name only
B. The taxpayer's name and tax ID number only
C. The taxpayer's name, tax ID number, taxable year, name of the preparer, and type of return prepared
D. Only a copy of the signed return
Correct Answer: C
Rationale: A preparer must maintain the taxpayer's name, tax ID number, taxable year of the taxpayer,
name of the preparer, and the type of return or claim for refund prepared. This documentation requirement
ensures proper recordkeeping for all returns prepared .
Question 4
Circular 230, Section 10.22 requires a practitioner to exercise due diligence. Except as provided in Sec
10.34 and 10.37, a practitioner will be presumed to have exercised due diligence if the practitioner relies
on:
A. Information received from the IRS taxpayer hotline
,B. Information received from the IRS practitioner hotline
C. The work product of another person and the practitioner used reasonable care in engaging, supervising,
training, and evaluating the person
D. Information obtained on the Internet
Correct Answer: C
Rationale: A practitioner is presumed to have exercised due diligence if they rely on the work product of
another person and used reasonable care in engaging, supervising, training, and evaluating that person,
taking proper account of the nature of the relationship between the practitioner and the person .
Question 5
How many future years will the IRS record to the Centralized Authentication File (CAF) at the taxpayer's
request based on receipt of a valid Form 2848 authorizing representation for tax years or periods?
A. December 31 of year of receipt + 1 year
B. December 31 of year of receipt + 2 years
C. December 31 of year of receipt + 3 years
D. December 31 of year of receipt + 4 years
Correct Answer: C
Rationale: According to 26 C.F.R. § 601.506(d)(3)(ii) and the instructions for Form 2848, the IRS will
record representation authorization to the CAF for up to 3 years from December 31 of the year the form is
received .
Question 6
To meet due diligence requirements for the Earned Income Credit, which of the following is true
regarding the Earned Income Credit Worksheet and Form 8867?
A. A record must be kept of how, when, and from whom the information used to prepare the Form 8867
and the Worksheets was obtained
B. Form 8867 does not need to be filed with the return if all information used to complete the form was
provided by the taxpayer in writing
C. A record of any questions the taxpayer may have asked the tax preparer about their eligibility for the
credits should be retained
D. Copies of documents provided by the taxpayer that the return preparer relied on to determine the
eligibility for the credits do not need to be retained by the preparer
Correct Answer: A
Rationale: Treasury Regulation § 1.6695-2(b) and the Instructions for Form 8867 require preparers to
maintain records of how, when, and from whom information used to prepare Form 8867 and the
worksheets was obtained. Form 8867 must be filed with the return, and copies of supporting documents
must be retained .
Question 7
In preparing an Earned Income Credit Worksheet and Form 8867, to meet the due diligence requirements,
a return preparer must retain for a certain period all of the following EXCEPT:
A. A record of from whom the information used to prepare the Form 8867 and the worksheets was
obtained
B. A copy of the Form 8867
C. A record of any questions the taxpayer may have asked the tax preparer about their eligibility for the
credits
D. Copies of documents provided by the taxpayer that the return preparer relied on to determine the
eligibility for the credits
Correct Answer: C
Rationale: The due diligence requirements require retention of: a copy of Form 8867; applicable
worksheets; copies of documents relied upon; a record of how, when, and from whom information was
, obtained; and a record of any additional questions THE TAX PREPARER (not the taxpayer) may have
asked. Questions asked by the taxpayer are not specifically required to be retained .
Question 8
A taxpayer filed an appeal of an IRS examination and then signed Form 8821, Tax Information
Authorization, authorizing an enrolled agent (EA) to receive the taxpayer's confidential tax information
related to the matter before the Independent Office of Appeals. Which of the following is correct
regarding the EA's ability to represent the taxpayer regarding the appeal?
A. The EA may represent the client based on the Form 8821
B. The EA may represent the client with the oral consent of the client
C. The EA may represent the client with a note attached to Form 8821
D. The EA may not represent the client based on the Form 8821
Correct Answer: D
Rationale: Form 8821 (Tax Information Authorization) only allows the designee to inspect and receive
confidential tax information. It does NOT authorize representation before the IRS. Representation
requires Form 2848 (Power of Attorney and Declaration of Representative) .
Question 9
What level of authority is needed for a tax return preparer to avoid an unreasonable position penalty on a
tax return if the position was not disclosed and is not a tax shelter or reportable transaction?
A. There is or was substantial authority for the position
B. There is reasonable basis for the position
C. The position would more likely than not be sustained on its merits
D. There is a 1-in-3, or greater, likelihood of being sustained on its merits
Correct Answer: A
Rationale: For the general category where a position is not disclosed, the preparer penalty under Section
6694(a) is avoided if there is or was substantial authority for the position. Reasonable basis applies only
to disclosed positions, and the more-likely-than-not standard applies to tax shelters .
Question 10
An enrolled agent's written communications with a client may be privileged under IRC Section 7525 if
they concern:
A. A criminal tax investigation
B. Preparing the client's tax return
C. Representing the client in an IRS examination
D. Encouraging the client to participate in a tax shelter
Correct Answer: C
Rationale: IRC Section 7525 extends a limited confidentiality privilege to tax practitioners for
communications regarding tax advice, but only in non-criminal matters before the IRS. The privilege does
NOT apply to tax return preparation or criminal investigations, and tax shelters are specifically excluded .
Question 11
When advertising their services, an enrolled agent may use which one of the following phrases to describe
their professional designation?
A. Certified to practice before the Internal Revenue Service
B. Admitted to practice before the Internal Revenue Service
C. Enrolled as a representative of the Internal Revenue Service
D. Licensed to practice before the Internal Revenue Service
Correct Answer: B
Rationale: Circular 230, Section 10.30(a)(1) specifically permits enrolled agents to use the phrase
"admitted to practice before the Internal Revenue Service" in their advertising. Other phrases implying
