Enrolled Agent (EA) Exam Part 3: Representation, Practices &
Procedures Study Guide
This comprehensive study resource is a premium test bank engineered for tax
professionals preparing for the Internal Revenue Service (IRS) Special Enrollment
Examination (SEE) Part 3. It delivers high-yield practice questions, verified answers,
and detailed step-by-step regulatory rationales fully updated for the 2026/2027
testing cycle and Treasury Department Circular 230 rules. Mastering these premium
materials ensures deep competence across taxpayer representation guidelines, IRS
audit practices, appeals procedures, and professional ethical standards to help you
secure your federal credentials on your very first attempt.
SECTION 1: PRACTICES & PROCEDURES – CIRCULAR 230
(Questions 1–100)
Subpart A: Rules of Practice (Questions 1–25)
1. Under Treasury Circular 230, which of the following actions constitutes the
"unauthorized practice of law" by an enrolled agent?
A. Filing Form 2848 for a client
B. Drafting a legal brief regarding a tax shelter opinion for a client
C. Representing a client in a collection hearing
D. Preparing a client's tax return
Correct Answer: B
,Rationale: Only attorneys may draft legal briefs for litigation or complex tax shelter
opinions that constitute practicing law. EAs and CPAs are prohibited from performing
legal services such as drafting legal pleadings. Filing Form 2848 (A), representing in a
collection hearing (C), and preparing returns (D) are within an EA's authorized scope of
practice.
2. An EA discovers that a client omitted a material fact on a tax return that was
filed three months ago. What is the EA's primary duty under Circular 230?
A. Immediately withdraw from representation and notify the IRS
B. Report the omission to the IRS anonymously
C. Advise the client promptly of the noncompliance and the consequences of the
omission
D. Correct the omission on the next year's return without telling the client
Correct Answer: C
Rationale: Circular 230 §10.21 requires practitioners to advise clients promptly of any
noncompliance, error, or omission. The EA must advise the client on how to correct it, but
does not have to withdraw unless the client refuses to rectify the error.
3. An enrolled agent owns stock in a publicly traded software company. The EA's
client wants to claim a deduction for donating that same software to a charity.
Under Circular 230, this situation is:
A. Permissible without disclosure because the stock is widely held
B. A disreputable act subject to automatic disbarment
C. A conflict of interest requiring written informed consent from the client
D. Only a conflict if the EA files the client's return for free
Correct Answer: C
,Rationale: A conflict of interest exists if the practitioner's financial interest could affect the
representation (e.g., the value of the EA's stock). Circular 230 §10.29 requires the EA to
obtain written informed consent from the client to proceed.
4. Which sanction can the Office of Professional Responsibility (OPR) impose
against an enrolled agent for violating Circular 230?
A. Imprisonment
B. Revocation of CPA license
C. Censure
D. A fine of $100,000
Correct Answer: C
Rationale: OPR may censure, suspend, or disbar a practitioner from practice before the IRS.
Censure is a public reprimand that does not revoke practice rights but warns the public.
Imprisonment (A) is a criminal penalty imposed by courts, not OPR. Revocation of a CPA
license (B) is handled by state boards. A $100,000 fine (D) is not an OPR sanction.
5. An EA wants to advertise services as a "Tax Specialist for IRS Disputes."
According to Circular 230 standards, this advertisement is:
A. Prohibited because it implies special expertise
B. Permissible if the statement is true and not misleading
C. Prohibited unless the EA is also an attorney
D. Permissible only with IRS pre-approval
Correct Answer: B
Rationale: Circular 230 allows advertising that is not false, fraudulent, or misleading. "Tax
Specialist for IRS Disputes" is permissible if it accurately describes the EA's services. No
pre-approval (D) is required, and it is not limited to attorneys (C).
, 6. Which of the following is a "disreputable act" under Circular 230 §10.51?
A. Filing a return with a position that lacks substantial authority but has a reasonable
basis with adequate disclosure
B. Failing to file a client's return due to the client's refusal to provide necessary
information
C. Willfully assisting a client in violating any federal tax law
D. Advising a client to seek a second opinion
Correct Answer: C
Rationale: Circular 230 §10.51 defines disreputable conduct to include willfully assisting a
client in violating any federal tax law. Options A, B, and D do not constitute disreputable
acts.
7. An EA is asked to prepare a tax return claiming a position that the EA believes is
frivolous. What should the EA do?
A. Prepare the return with a disclosure statement
B. Prepare the return and advise the client of the risk
C. Refuse to prepare the return and advise the client of the position's frivolity
D. Prepare the return but not sign it
Correct Answer: C
Rationale: Circular 230 §10.34(a) prohibits a practitioner from signing a return or advising
a client to take a position that lacks a reasonable basis or is frivolous. The EA must refuse
to prepare the return and advise the client. A disclosure statement (A) does not cure a
frivolous position.
Procedures Study Guide
This comprehensive study resource is a premium test bank engineered for tax
professionals preparing for the Internal Revenue Service (IRS) Special Enrollment
Examination (SEE) Part 3. It delivers high-yield practice questions, verified answers,
and detailed step-by-step regulatory rationales fully updated for the 2026/2027
testing cycle and Treasury Department Circular 230 rules. Mastering these premium
materials ensures deep competence across taxpayer representation guidelines, IRS
audit practices, appeals procedures, and professional ethical standards to help you
secure your federal credentials on your very first attempt.
SECTION 1: PRACTICES & PROCEDURES – CIRCULAR 230
(Questions 1–100)
Subpart A: Rules of Practice (Questions 1–25)
1. Under Treasury Circular 230, which of the following actions constitutes the
"unauthorized practice of law" by an enrolled agent?
A. Filing Form 2848 for a client
B. Drafting a legal brief regarding a tax shelter opinion for a client
C. Representing a client in a collection hearing
D. Preparing a client's tax return
Correct Answer: B
,Rationale: Only attorneys may draft legal briefs for litigation or complex tax shelter
opinions that constitute practicing law. EAs and CPAs are prohibited from performing
legal services such as drafting legal pleadings. Filing Form 2848 (A), representing in a
collection hearing (C), and preparing returns (D) are within an EA's authorized scope of
practice.
2. An EA discovers that a client omitted a material fact on a tax return that was
filed three months ago. What is the EA's primary duty under Circular 230?
A. Immediately withdraw from representation and notify the IRS
B. Report the omission to the IRS anonymously
C. Advise the client promptly of the noncompliance and the consequences of the
omission
D. Correct the omission on the next year's return without telling the client
Correct Answer: C
Rationale: Circular 230 §10.21 requires practitioners to advise clients promptly of any
noncompliance, error, or omission. The EA must advise the client on how to correct it, but
does not have to withdraw unless the client refuses to rectify the error.
3. An enrolled agent owns stock in a publicly traded software company. The EA's
client wants to claim a deduction for donating that same software to a charity.
Under Circular 230, this situation is:
A. Permissible without disclosure because the stock is widely held
B. A disreputable act subject to automatic disbarment
C. A conflict of interest requiring written informed consent from the client
D. Only a conflict if the EA files the client's return for free
Correct Answer: C
,Rationale: A conflict of interest exists if the practitioner's financial interest could affect the
representation (e.g., the value of the EA's stock). Circular 230 §10.29 requires the EA to
obtain written informed consent from the client to proceed.
4. Which sanction can the Office of Professional Responsibility (OPR) impose
against an enrolled agent for violating Circular 230?
A. Imprisonment
B. Revocation of CPA license
C. Censure
D. A fine of $100,000
Correct Answer: C
Rationale: OPR may censure, suspend, or disbar a practitioner from practice before the IRS.
Censure is a public reprimand that does not revoke practice rights but warns the public.
Imprisonment (A) is a criminal penalty imposed by courts, not OPR. Revocation of a CPA
license (B) is handled by state boards. A $100,000 fine (D) is not an OPR sanction.
5. An EA wants to advertise services as a "Tax Specialist for IRS Disputes."
According to Circular 230 standards, this advertisement is:
A. Prohibited because it implies special expertise
B. Permissible if the statement is true and not misleading
C. Prohibited unless the EA is also an attorney
D. Permissible only with IRS pre-approval
Correct Answer: B
Rationale: Circular 230 allows advertising that is not false, fraudulent, or misleading. "Tax
Specialist for IRS Disputes" is permissible if it accurately describes the EA's services. No
pre-approval (D) is required, and it is not limited to attorneys (C).
, 6. Which of the following is a "disreputable act" under Circular 230 §10.51?
A. Filing a return with a position that lacks substantial authority but has a reasonable
basis with adequate disclosure
B. Failing to file a client's return due to the client's refusal to provide necessary
information
C. Willfully assisting a client in violating any federal tax law
D. Advising a client to seek a second opinion
Correct Answer: C
Rationale: Circular 230 §10.51 defines disreputable conduct to include willfully assisting a
client in violating any federal tax law. Options A, B, and D do not constitute disreputable
acts.
7. An EA is asked to prepare a tax return claiming a position that the EA believes is
frivolous. What should the EA do?
A. Prepare the return with a disclosure statement
B. Prepare the return and advise the client of the risk
C. Refuse to prepare the return and advise the client of the position's frivolity
D. Prepare the return but not sign it
Correct Answer: C
Rationale: Circular 230 §10.34(a) prohibits a practitioner from signing a return or advising
a client to take a position that lacks a reasonable basis or is frivolous. The EA must refuse
to prepare the return and advise the client. A disclosure statement (A) does not cure a
frivolous position.
