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A Guide to Passing the Enrolled Agent Exam (Part 1)

By John Everett posted 07-22-2015 03:35 PM

  

by John Everett, CPA, Ph.D.

Know the Cardinal Rule of Studying -  There are absolutely no shortcuts to passing the SEE. You must have an organized approach. Plan to study at least 50 hours for each part of the exam, at a pace of at least 10 to 15 hours per week.Take plenty of notes (inyour own words) that provide shorthand references to the tax law for the more important provisions. Leave time to take a practice exam at least two weeks prior to the exam to highlight weak spots. Past exams are available at www.irs.gov, although these are in the old format. Still, they’ll give you a feel for the types of questions (and time pressure) you’ll likely see on the real thing. (But remember, the entire exam is now multiple-choice; there are no true-false questions.)

Consider a Review Course - There are a number of review courses, both self-study and live, devoted to the SEE. The advantage of such courses is that the authors have usually analyzed the past examinations and have organized the study material in a condensed manner for maximum coverage. In essence, you are paying for an organized approach to studying for the exam, and this may be of some value to you.

The National Society of Accountants offers study courses in various formats:

Don’t Worry About the Math of Passing - The grading procedure on the revised exam as described by Prometric is somewhat murky, as the raw score (number right out of total number of questions) will be converted to a scale between 40 and 130, with 105 set as a passing score per mandate by the IRS. Assuming this is a linear scale that starts at a score of 0, a passing score of 105 is 65 points above the lowest score, out of 90 total points. This seems to imply that a score of roughly 73 percent would be passing (65/90), but who really knows? For example, if the minimum score of 40 is given to all scores below a certain level (say, 30 percent), then the required percentage of right answers would decrease.

Under the old IRS format of the exam, each part had 80 questions of varying point values that totaled 175 points. Parts 1 through 3 of the old exam had 20 true-false questions worth 1 point each, 25 non-computational, multiple-choice questions worth 2 points each, and 35 computational, multiple-choice questions worth 3 points each. Note that 60 percent of this 175-point total is 105 points. This appears to be the source of the 105 points on the new IRS-mandated scale, but the question is whether this scaled score implies a 60- or 70-percent minimum passing score.

The moral of the story? Don’t worry about the possible scale. If you really work at it, you’ll clear either hurdle.

Think Like an Examiner - Never lose sight of the purpose of the examination - to ensure that the successful applicant has demonstrated a minimum level of competence necessary to represent a taxpayer before the IRS. For that reason, expect the vast majority of the questions on the exam to test the basic fundamentals of taxation.

For example, the exam may not address the exotic details of a tax straddle, but you can certainly expect questions on the basic netting of capital gains and losses. Ask yourself what some of the basic concepts are that every tax practitioner should know, and make sure that you can answer those questions. These include such items as the basic corporate tax formula, the flow-through nature of partnerships and S corporations, the basic features of an IRA, and the distinguishing charac- teristics of deductions for and from adjusted gross income.

A Guide to Passing the Enrolled Agent Exam (Part 2)

A Guide to Passing the Enrolled Agent Exam (Part 3)



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