Free SEE Part 3 practice test: 20 questions
Twenty original questions weighted like the real SEE Part 3: six on Practices and Procedures, six on Representation before the IRS, five on Specific Areas of Representation and three on the Filing Process. That mirrors the 26/25/20/14 split of the 85 scored questions. None of these are real exam items. Give yourself about 40 minutes — roughly the pace the real exam requires.
Practices and Procedures
Question 1. Which of the following individuals has unlimited rights to represent taxpayers before the IRS?
- A. An enrolled retirement plan agent
- B. An unenrolled preparer with an Annual Filing Season Program record
- C. An enrolled agent who is not under suspension
- D. A payroll clerk representing her employer
Show answer
Answer: C
Attorneys, CPAs and enrolled agents who are not suspended or disbarred may practise before the IRS without limitation. Enrolled retirement plan agents are limited to retirement plan matters, and an unenrolled preparer’s representation rights are limited to examinations of returns they prepared and signed.
Question 2. An enrolled agent represents two partners in separate matters and realises their interests are directly adverse. Under Circular 230, the agent may continue only if:
- A. Each client gives informed consent confirmed in writing, and the agent reasonably believes both can be represented competently
- B. The agent notifies the IRS of the conflict
- C. The agent charges each client a reduced fee
- D. One client verbally agrees to the arrangement
Show answer
Answer: A
Section 10.29 allows representation despite a conflict if the practitioner reasonably believes they can represent each client competently and diligently, the representation is not prohibited by law, and each affected client gives informed consent confirmed in writing within 30 days. The consents must be kept for at least 36 months.
Question 3. A client asks an enrolled agent to have the client's refund deposited into the agent's business account so the agent can deduct the fee. What is the correct response?
- A. Accept, as long as the client signs a written consent
- B. Accept, but only for the amount of the fee
- C. Accept, if the arrangement is disclosed on the return
- D. Decline, because a practitioner may not direct a client’s refund into an account the practitioner controls
Show answer
Answer: D
Section 10.31 prohibits a practitioner from endorsing or negotiating a client’s government refund check, including directing or accepting the payment into an account the practitioner or the firm owns or controls. The client’s consent does not change the rule.
Question 4. An enrolled agent is completing continuing education. Which statement is correct?
- A. 72 hours per year, including 6 hours of ethics
- B. At least 16 hours each year, including 2 hours of ethics
- C. 24 hours per year with no ethics requirement
- D. 72 hours per cycle, with no annual minimum
Show answer
Answer: B
Enrolled agents need 72 hours of continuing education per three-year enrollment cycle, with at least 16 hours each year, 2 of which must be ethics. The cycle total includes 6 hours of ethics. Records are kept for four years after renewal.
Question 5. A preparer takes an undisclosed position on a client's return that lacks substantial authority, resulting in an understatement. Which penalty is the preparer most exposed to?
- A. Section 6695(a)
- B. Section 6695(g)
- C. Section 6694(a)
- D. Section 6713
Show answer
Answer: C
Section 6694(a) penalises a preparer for an understatement due to an unreasonable position that the preparer knew or reasonably should have known about. A position is unreasonable if it lacks substantial authority and is not disclosed. Section 6695(a) concerns failure to give the taxpayer a copy, 6695(g) concerns due diligence on certain credits and head of household status, and 6713 concerns unauthorised disclosure.
Question 6. All of the following are examples of disreputable conduct under Circular 230 EXCEPT:
- A. Declining to accept a new client’s engagement
- B. Wilfully failing to file one’s own federal return
- C. Knowingly giving false information to an IRS employee
- D. Failing to remit funds a client provided for payment of taxes
Show answer
Answer: A
Declining an engagement is a practitioner’s right and not sanctionable. Wilfully failing to file one’s own return, giving false information to the IRS knowingly, and misappropriating funds a client gave for payment of taxes are all listed as disreputable conduct in section 10.51.
Representation before the IRS
Question 7. A taxpayer files a new Form 2848 naming a second representative for the same tax matters and years, without checking the box to retain the existing authorisation. What is the effect?
- A. Both representatives remain authorised
- B. The earlier power of attorney for those matters is revoked
- C. Any Form 8821 on file is also revoked
- D. The new form is invalid until the first representative withdraws
Show answer
Answer: B
A new Form 2848 generally revokes earlier powers of attorney on file for the same matters unless the taxpayer checks the box on line 6 and attaches copies of the powers to be retained. Filing a 2848 does not revoke any Form 8821 in effect.
Question 8. Which of the following may be named as a designee on Form 8821?
- A. Only an attorney, CPA or enrolled agent
- B. Only an individual with a CAF number
- C. Only a family member of the taxpayer
- D. Any individual or organisation the taxpayer chooses
Show answer
Answer: D
Form 8821 authorises any individual, corporation, firm, organisation or partnership to inspect and receive confidential tax information. It does not authorise representation, so the designee does not have to be eligible to practise.
Question 9. On Form 2848, how many representatives may be designated to receive copies of IRS notices and communications for the same matter?
- A. Two
- B. One
- C. Four
- D. There is no limit
Show answer
Answer: A
The Form 2848 instructions allow no more than two representatives to receive copies of notices and communications for the same matters, even though more representatives can be named.
Question 10. Which source is authoritative and binding on the IRS for all taxpayers?
- A. A private letter ruling issued to another taxpayer
- B. The Internal Revenue Manual
- C. Treasury regulations
- D. An IRS publication
Show answer
Answer: C
Treasury regulations interpret the Code and carry legal authority for all taxpayers. A private letter ruling binds only the taxpayer who requested it, the Internal Revenue Manual guides IRS staff but gives taxpayers no rights, and IRS publications are informal guidance that cannot be relied on as authority.
Question 11. A client filed a 2023 return on time on its due date. Absent fraud, a substantial omission or an extension agreement, how long does the IRS generally have to assess additional tax?
- A. Two years
- B. Three years
- C. Six years
- D. Ten years
Show answer
Answer: B
The general assessment period is three years from the later of the filing date or the due date. It extends to six years for a substantial omission of income and is unlimited for fraud or where no return was filed. Ten years is the general collection period after assessment.
Question 12. While reviewing a new client's records, an enrolled agent sees signs that the client deliberately hid income over several years. What is the most appropriate step?
- A. Report the client to the IRS immediately
- B. File amended returns for all years without discussing it
- C. Continue as normal, relying on the practitioner privilege
- D. Recognise possible criminal exposure and advise the client to consult a criminal tax attorney
Show answer
Answer: D
Possible criminal exposure changes the representation. The practitioner privilege under section 7525 does not apply in criminal matters, so the agent should recognise the risk and advise the client to consult a criminal tax attorney before going further. Contacting the IRS or filing amended returns without that advice could harm the client.
Specific Areas of Representation
Question 13. Which of the following is NOT one of the grounds for an offer in compromise?
- A. Doubt as to collectibility
- B. Doubt as to liability
- C. Reasonable cause
- D. Effective tax administration
Show answer
Answer: C
The IRS accepts offers on three grounds: doubt as to collectibility, doubt as to liability and effective tax administration. Reasonable cause is a basis for penalty relief, not for compromising a tax liability.
Question 14. Who can be held personally liable for the trust fund recovery penalty?
- A. Any shareholder of the business
- B. A person responsible for paying the withheld taxes who willfully failed to pay them
- C. Only the corporation’s president
- D. Any employee whose wages had tax withheld
Show answer
Answer: B
The trust fund recovery penalty applies to any person responsible for collecting and paying over withheld taxes who willfully failed to do so. Responsibility and willfulness are both required. Ownership alone is not enough, and it is not limited to officers.
Question 15. A client who disagreed with an examination did not settle at Appeals. Which notice gives the client the right to petition the Tax Court without paying first?
- A. The notice of deficiency (90-day letter)
- B. The 30-day letter
- C. A CP2000 notice
- D. A final notice of intent to levy
Show answer
Answer: A
The statutory notice of deficiency, or 90-day letter, gives the taxpayer 90 days (150 if addressed outside the US) to petition the Tax Court without paying the tax. The 30-day letter offers an Appeals conference. A CP2000 is an under-reporting proposal, and a final notice of intent to levy is a collection notice.
Question 16. A client with a clean compliance history for the prior three years received a failure-to-file penalty. The client had no unusual circumstances. What relief is most likely available?
- A. Reasonable cause abatement
- B. Interest abatement for a ministerial act
- C. An offer in compromise based on doubt as to liability
- D. First-time abatement
Show answer
Answer: D
First-time abatement is an administrative waiver for taxpayers with a clean recent compliance history, and it does not require reasonable cause. Reasonable cause needs facts showing ordinary business care and prudence. Interest abatement under section 6404(e) relates to IRS delays, and an offer based on doubt as to liability disputes the tax itself.
Question 17. Which statement about the practitioner privilege under section 7525 is correct?
- A. It applies to all communications, including in criminal cases
- B. It applies only to attorneys
- C. It applies to tax advice in noncriminal matters, but not to written tax shelter promotion
- D. It protects the taxpayer’s own business records from a summons
Show answer
Answer: C
Section 7525 extends confidentiality similar to attorney-client privilege to tax advice from a federally authorised tax practitioner, including an enrolled agent, but only in noncriminal tax matters before the IRS and in federal court. It does not cover written communications promoting tax shelters.
Filing Process
Question 18. An enrolled agent is applying to become an authorised IRS e-file provider. Which statement is correct?
- A. The agent’s PTIN serves as the EFIN
- B. The agent can provide the enrollment credential instead of fingerprints
- C. No suitability check applies to enrolled agents
- D. The EFIN must be renewed every year with the PTIN
Show answer
Answer: B
Principals and Responsible Officials on the e-file application must pass a suitability check and are fingerprinted unless they provide professional credentials; enrolled agents, attorneys and CPAs can provide credentials instead. The EFIN is assigned to the firm after acceptance and is separate from the PTIN and CAF number.
Question 19. A rejected individual return was transmitted on the due date. By when must the corrected electronic return be resubmitted to be treated as timely filed?
- A. By the fifth calendar day after the due date
- B. Within 24 hours of the rejection
- C. By the tenth calendar day after the due date, electronically
- D. By the extended due date, automatically
Show answer
Answer: A
A rejected individual return submitted on or before the due date is timely if it is corrected and resubmitted by the fifth calendar day after the due date. If it must be filed on paper, the deadline is the later of the due date or ten calendar days after the rejection notice.
Question 20. Which e-file infraction level may result in a written reprimand?
- A. Level Three
- B. Level Two
- C. Any level, at the provider’s option
- D. Level One
Show answer
Answer: D
Level One infractions have little or no adverse impact on e-file and may result in a written reprimand. Level Two can bring a one- or two-year suspension, and Level Three a two-year suspension or expulsion.
How did you do?
Sixteen or more correct suggests you are close to exam-ready. Below fourteen, work through the domain guides — Practices and Procedures, Representation, Specific Areas of Representation and Filing Process — before booking. Part 3 rewards exact rules, so check whether your misses were gaps in knowledge or two similar rules confused; the second kind is fixed fastest with side-by-side tables.