Part 1 Individuals
33%of exam
FilingDependentsIncomeDeductionsCredits
Part 2 Businesses
33%of exam
EntitiesPayrollAccountingDepreciationK-1
Part 3 Representation
34%of exam
PracticeCircular 230POAResearchPenalties
Quick Facts
- Exam
- IRS SEE
- Parts
- 3
- Questions
- 100 per part
- Scored
- 85 per part
- Time
- 3.5 hours
- Pass
- 105 scaled
- Vendor
- PSI
- Law year
- 2025
Child Tests
Relationship, age, residency, support, joint
QC five testsQR four testsSupport matters
Extension vs Payment
Extension
- Extends filing
- Form 4868
- October deadline
Payment
- Still April
- Interest accrues
- Penalty possible
File later, pay now
Individual Form Picker
- Individual return→Form 1040
- Senior return→1040-SR
- Need filing extension→Form 4868
- Correct filed return→1040-X
- Interest/dividends→Schedule B
- Rentals/royalties→Schedule E
Filing Basics
- Form 1040
- Individual return
- 1040-SR
- Senior return
- April 15
- Standard due date
- Form 4868
- File extension
- October 15
- Extended filing date
- 1040-X
- Amended return
- PTIN
- Preparer ID
- Due diligence
- Verify reasonableness
QC vs QR
Qualifying child
- Age test
- Residency test
- Relationship test
Qualifying relative
- Gross income test
- Support test
- No age test
Child tests vs relative
Status + Dependents
- Single
- Unmarried filer
- MFJ
- Joint married return
- MFS
- Separate married return
- HOH
- Qualifying home support
- QSS
- Surviving spouse status
- Qualifying child
- Five tests
- Qualifying relative
- Four tests
- Support test
- Over half support
Individual Income
- W-2
- Employee wages
- 1099-NEC
- Nonemployee pay
- Schedule B
- Interest/dividends
- Schedule E
- Rentals/royalties
- Alimony post-2018
- Not taxable
- Gambling winnings
- Taxable income
- Cancellation debt
- Possible income
- K-1
- Pass-through share
Deductions + Credits
- Standard deduction
- No Schedule A
- Itemized
- Schedule A
- Medical floor
- 7.5% AGI
- SALT cap
- $10,000
- QBI
- Section 199A
- CTC
- Child tax credit
- EITC
- Earned income credit
- AOC
- Education credit
Property + Retirement
- Basis
- Tax investment
- Short-term gain
- One year or less
- Long-term gain
- Over one year
- Capital loss
- $3,000 limit
- Section 121
- Home-sale exclusion
- Wash sale
- Loss disallowed
- Traditional IRA
- Pre-tax possible
- Roth IRA
- After-tax contributions
Business Forms
C, 1065, 1120, 1120-S
Sole propPartnershipC corpS corp
Employee vs Contractor
Employee
- W-2
- Employer control
- Payroll taxes
Contractor
- 1099-NEC
- Independent work
- SE tax
Control drives status
Entity Return Picker
- Sole proprietor→Schedule C
- Partnership→Form 1065
- C corporation→Form 1120
- S corporation→Form 1120-S
- Trust or estate→Form 1041
- Exempt organization→Form 990
Entity Types
- Schedule C
- Sole proprietor
- Partnership
- Form 1065
- C corp
- Form 1120
- S corp
- Form 1120-S
- Trust/estate
- Form 1041
- Exempt org
- Form 990
- LLC
- State-law entity
- Form 8832
- Entity election
Cash vs Accrual
Cash
- When received
- When paid
- Simpler timing
Accrual
- When earned
- When incurred
- Matching concept
Cash flow vs rights
Accounting + Payroll
- Cash method
- Income when received
- Accrual
- Earned/incurred timing
- Inventory
- COGS rules
- Constructive receipt
- Available income
- Form 941
- Payroll taxes
- FUTA
- Federal unemployment
- TFRP
- Trust fund penalty
- EIN
- Business tax ID
Deductions + Assets
- Ordinary
- Common in business
- Necessary
- Helpful and appropriate
- Meals
- Usually 50%
- Home office
- Regular exclusive use
- MACRS
- Tax depreciation
- Section 179
- Expense election
- Bonus depreciation
- Accelerated recovery
- Listed property
- Strict substantiation
Pass-Throughs
- Partner basis
- Outside basis
- Inside basis
- Entity asset basis
- Guaranteed payment
- Partner service pay
- At-risk
- Loss limitation
- Passive activity
- Participation limit
- S election
- Form 2553
- Reasonable comp
- S corp wages
- Built-in gains
- S corp tax
SEE Parts
Individuals, businesses, representation
Part 1Part 2Part 3
2848 vs 8821
2848
- Represent taxpayer
- Acts authorized
- Practitioner signs
8821
- Receive data
- No representation
- Information only
Act vs view
Representation Picker
- Represent taxpayer→Form 2848
- Receive information→Form 8821
- Third-party designee→Checkbox authority
- Apply as EA→Form 23
- Renew EA status→Form 8554
- Client omission→Advise correction
Representation Rules
- EA
- Unlimited IRS practice
- Circular 230
- Practice rules
- OPR
- Practitioner discipline
- Form 2848
- Power of attorney
- Form 8821
- Info authorization
- CAF
- Authorization file
- Form 23
- Enrollment application
- Form 8554
- Enrollment renewal
EA vs Unenrolled
EA
- Unlimited IRS rights
- Circular 230
- All taxpayers
Unenrolled
- Limited rights
- Prepared returns
- Restricted matters
Unlimited vs limited
Penalty Picker
- Late return→Failure-to-file
- Late payment→Failure-to-pay
- Good history→FTA
- Facts justify→Reasonable cause
- Payroll trust funds→TFRP
- Joint-return relief→Form 8857
Research + Penalties
- IRC
- Highest tax statute
- Regulations
- Treasury interpretation
- Rev. Rul.
- IRS position
- Tax Court
- Prepayment forum
- FTA
- First-time abatement
- Reasonable cause
- Penalty defense
- Innocent spouse
- Form 8857
- FOIA
- Records request
Common Traps
Extension trap
Extends filing only ≠ Tax still due
Post-2018 alimony
Recipient excludes ≠ Payer cannot deduct
SALT cap
Itemized only ≠ $10,000 cap
2848 vs 8821
2848 represents ≠ 8821 receives data
State vs tax entity
LLC is state-law ≠ Tax election controls
Pass vs score
Pass hides score ≠ Fail shows scaled score
Last Minute
- 1.Each part has 100 questions
- 2.85 scored, 15 experimental
- 3.Pass = 105 scaled
- 4.Law year = 2025
- 5.Extension files, not pays
- 6.QC has five tests
- 7.LLC tax status elected
- 8.S corp needs wages
- 9.2848 acts; 8821 views
- 10.Circular 230 governs practice
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