Enrolled Agent Exam Part 3 Questions
and Answers Graded A+
What form is required to authorize an Enrolled Agent to represent a taxpayer before the IRS?
✔✔Form 2848 (Power of Attorney and Declaration of Representative)
What is the penalty for failure to file a tax return on time?
✔✔5% of the unpaid taxes per month, up to a maximum of 25%
What is the deadline for filing a tax return for most individual taxpayers?
✔✔April 15th of the year following the tax year
Which type of tax return must an Enrolled Agent file for a self-employed individual?
✔✔Form 1040 with Schedule C (Profit or Loss from Business)
How long must an individual keep tax records for audit purposes?
✔✔At least 3 years after the due date of the return or the date it was filed, whichever is later
1
,What is the maximum contribution for a Health Savings Account (HSA) for an individual under
55 years old in 2023?
✔✔$3,850
What is the purpose of Form 1040X?
✔✔To amend a previously filed tax return
Which of the following deductions is allowed under the standard deduction for a married couple
filing jointly?
✔✔$27,700 for the 2023 tax year
What is the taxability of Social Security benefits?
✔✔Taxable depending on the taxpayer's total income
How are capital gains taxed for individuals in the 2023 tax year?
✔✔Long-term capital gains are taxed at 0%, 15%, or 20% depending on income levels, while
short-term capital gains are taxed as ordinary income
2
,What type of income is excluded from taxable income?
✔✔Interest earned on municipal bonds
How does an Enrolled Agent help a taxpayer in an audit?
✔✔By representing the taxpayer before the IRS and providing documentation to support the
taxpayer's position
What is the penalty for underpayment of estimated taxes?
✔✔Interest on the underpayment and a penalty of up to 0.5% of the underpaid amount per month
What types of taxpayers are required to file estimated tax payments?
✔✔Self-employed individuals, those with substantial investment income, and those who expect
to owe at least $1,000 in taxes after subtracting withholding
What is the maximum contribution for a Traditional IRA in 2023 for individuals under age 50?
✔✔$6,500
What is the main purpose of the Earned Income Tax Credit (EITC)?
3
, ✔✔To provide tax relief to low- and moderate-income workers
What does the IRS use to determine if a taxpayer qualifies for innocent spouse relief?
✔✔The taxpayer must prove they did not know, and had no reason to know, of the incorrect
items reported on the tax return
How long does the IRS have to audit a taxpayer’s return?
✔✔Generally, 3 years from the date the return was filed, but it can extend to 6 years if income is
underreported by 25% or more
What is the tax treatment of child support payments?
✔✔Child support is not taxable to the recipient and not deductible by the payer
What is the procedure for applying for an extension to file a tax return?
✔✔File Form 4868 (Application for Automatic Extension of Time to File U.S. Individual
Income Tax Return)
What is the maximum deduction allowed for charitable contributions in 2023?
4
and Answers Graded A+
What form is required to authorize an Enrolled Agent to represent a taxpayer before the IRS?
✔✔Form 2848 (Power of Attorney and Declaration of Representative)
What is the penalty for failure to file a tax return on time?
✔✔5% of the unpaid taxes per month, up to a maximum of 25%
What is the deadline for filing a tax return for most individual taxpayers?
✔✔April 15th of the year following the tax year
Which type of tax return must an Enrolled Agent file for a self-employed individual?
✔✔Form 1040 with Schedule C (Profit or Loss from Business)
How long must an individual keep tax records for audit purposes?
✔✔At least 3 years after the due date of the return or the date it was filed, whichever is later
1
,What is the maximum contribution for a Health Savings Account (HSA) for an individual under
55 years old in 2023?
✔✔$3,850
What is the purpose of Form 1040X?
✔✔To amend a previously filed tax return
Which of the following deductions is allowed under the standard deduction for a married couple
filing jointly?
✔✔$27,700 for the 2023 tax year
What is the taxability of Social Security benefits?
✔✔Taxable depending on the taxpayer's total income
How are capital gains taxed for individuals in the 2023 tax year?
✔✔Long-term capital gains are taxed at 0%, 15%, or 20% depending on income levels, while
short-term capital gains are taxed as ordinary income
2
,What type of income is excluded from taxable income?
✔✔Interest earned on municipal bonds
How does an Enrolled Agent help a taxpayer in an audit?
✔✔By representing the taxpayer before the IRS and providing documentation to support the
taxpayer's position
What is the penalty for underpayment of estimated taxes?
✔✔Interest on the underpayment and a penalty of up to 0.5% of the underpaid amount per month
What types of taxpayers are required to file estimated tax payments?
✔✔Self-employed individuals, those with substantial investment income, and those who expect
to owe at least $1,000 in taxes after subtracting withholding
What is the maximum contribution for a Traditional IRA in 2023 for individuals under age 50?
✔✔$6,500
What is the main purpose of the Earned Income Tax Credit (EITC)?
3
, ✔✔To provide tax relief to low- and moderate-income workers
What does the IRS use to determine if a taxpayer qualifies for innocent spouse relief?
✔✔The taxpayer must prove they did not know, and had no reason to know, of the incorrect
items reported on the tax return
How long does the IRS have to audit a taxpayer’s return?
✔✔Generally, 3 years from the date the return was filed, but it can extend to 6 years if income is
underreported by 25% or more
What is the tax treatment of child support payments?
✔✔Child support is not taxable to the recipient and not deductible by the payer
What is the procedure for applying for an extension to file a tax return?
✔✔File Form 4868 (Application for Automatic Extension of Time to File U.S. Individual
Income Tax Return)
What is the maximum deduction allowed for charitable contributions in 2023?
4
