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How to Interpret Enrolled Agent Exam Questions

How to Interpret Enrolled Agent Exam Questions

The Enrolled Agent exam is a challenging test that covers a variety of topics. The questions can be tricky, and it’s important to know how to approach and interpret them correctly. Here is some helpful information on Enrolled Agent exam questions and approaches you can take to study.

What is the Enrolled Agent exam?

The Enrolled Agent exam, officially called the Special Enrollment Exam (SEE), is a three-part, computer-based test covering various tax-related topics. The exam is administered by Prometric on behalf of the IRS and is used to assess your knowledge and skills in tax law. Each part includes 100 multiple-choice questions.

How is the Enrolled Agent exam graded?

The Enrolled Agent exam is graded on a scale of 40-130. You must score a 105 or above on each part to pass.

Many candidates succeed on their first attempt. The pass rate for each part hovers between 60 and 90 percent. You can increase your chances of success by studying at least 10 hours per week.

Enrolled Agent exam questions

Multiple-choice questions (MCQs) on the Enrolled Agent exam consist of three basic parts: the question stem, the best answer choice, and the distractors.

The question stem is the part of the question that asks you to do something. It includes the information you need to answer the question. 

The best answer choice is the one that most accurately responds to the question stem. Distractors are the other choices that may look right but are actually incorrect.

Types of MCQs

There are three types of MCQs that you’ll encounter: 

  • Direct questions These are the most common EA exam questions. You’ll be asked a straightforward question and will have four potential answers to choose from.
  • Incomplete sentencesWith this style of question, you will need to select the answer that best completes the sentence.
  • Negative questionsThese questions include the words NOT or EXCEPT in all caps. Remember to pay close attention when you spot these words. It’s easy to get confused when you’re also answering direct questions. The correct answer will be the one that is not like the others.

Techniques for answering MCQs

Now that you understand the basics of MCQs, let’s talk about how to answer them. A few key techniques can help you select the best answer choice.

one

Read the question stem carefully

Many candidates make the mistake of skimming over it and only reading the answer choices. This can lead to confusion and cause you to select the wrong answer. Read the question stem first to figure out exactly what the question is asking so that you aren’t distracted by any extra information included. 

two

Eliminate answer choices

The Enrolled Agent exam is a multiple-choice test, which means there is always only one correct answer. If you can eliminate even one distractor, your chances of guessing the correct answer go up significantly. Try to use a process of elimination whenever possible.

three

Make an educated guess

If you’re stuck between two answers and can’t eliminate either one, make an educated guess. Narrow down your options, then choose the answer that seems most logical.

four

Avoid overthinking

The Enrolled Agent exam is designed to test your knowledge of tax law, not your ability to outsmart the test makers. If you find yourself second-guessing an answer, chances are it’s probably correct.

five

Take your time

You have three and a half hours to complete each part of the Enrolled Agent exam, so there’s no need to rush. Read each question carefully and take an average of 1.5 minutes to answer each question. If you don’t know the answer to a question, make an educated guess and flag it so you can come back later.

six

Answer every question

Your score on the Enrolled Agent exam is based entirely on the number of correct answers you provide. That means that you’re not penalized for answering wrongly. Skipping questions is a mistake when you’re taking this test. A random guess has a 25 percent chance of being correct.

Enrolled Agent exam study tips by part

Now, let’s discuss how to prepare for the exam.

Part 1: Individuals

This part covers topics like filing status, dependents, gross income, adjustments to income, itemized deductions, and tax credits. You’ll also be tested on your knowledge of self-employment taxes and retirement plans. 

To prepare for this part of the Enrolled Agent exam, start by reviewing IRS publications like Form W-12 Opens in new window and Publication 17. These free resources will give you a good overview of the individual tax return process.

Part 2: Businesses

This part covers topics like business entity types, income, expenses, assets, liabilities, and tax credits. You’ll need to demonstrate your knowledge of payroll taxes and information returns. 

To prepare for this part, start by reviewing IRS resources like Publication 15 (Circular E), which covers employer responsibilities for withholding, depositing, and paying employment taxes.

Part 3: Representation, Practices & Procedures

This part tests your knowledge of Circular 230 rules, IRS practice and procedure, and ethics. 

To prepare for this part, review Circular 230 and the Enrolled Agent exam study materials provided by the IRS. You should also brush up on your knowledge of professional ethics and standards.

Gleim EA Review

The easiest way to ensure you’re prepared to pass your EA exam is to get Gleim. We offer a comprehensive Enrolled Agent review course covering all three exam parts, and have been helping candidates earn their EAs for decades. Our system includes audio lectures, textbooks, practice quizzes, simulated exams, and the largest test bank of MCQs. Get Gleim and get started on your path to becoming an Enrolled Agent.