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Enrolled Agent Exam Questions and Answers- Part 1 Section 1
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Enrolled Agent Exam Questions and Answers- Part 1 Section 1
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Enrolled Agent - Part 1 Section 11A #100054
Which one of the following criteria is used to determine a taxpayer's "tax home," if the taxpayer does
not have a regular or main place of business or work?
The taxpayer performs part of his business in the area surrounding his main home and uses that home
for lodging while doing business in the area.
The taxpayer has living expenses at his main home that are duplicated because his business requires him
to be away from that home.
The taxpayer has not abandoned the area in which both his traditional place of lodging and his main
home are located; members of his family live at his main home; or he often uses that home for lodging.
All of the answer choices are correct. - Answer -All of the answer choices are correct.
There are three factors that are stipulated in Publication 463, page 3 and 4, that are used to determine
the person's tax home if the taxpayer does not have a regular or main place of business or work:
The taxpayer performs part of his or her business in the area of his or her main home and uses that
home for lodging while doing business in the area.
The taxpayer has living expenses at his or her main home that the taxpayer duplicates because the
taxpayer's business requires the taxpayer to be away from that home.
The taxpayer has not abandoned the area in which both the taxpayer's historical place of lodging and
claimed main home are located; the taxpayer has a member or members of his or her family living at the
main home; or the taxpayer often uses that home for lodging.
In this problem, all three responses correspond to the above listed factors.
,Publication 463Pages 3-4
1A #100616
What action can a tax preparer take when the taxpayer has been audited for the same items in either of
the 2 preceding years, had no change proposed on his or her tax liability, and receives notice that his or
her return has been selected for examination?
The tax preparer can disregard the notice under the repeat examination rule.
The tax preparer must submit to the examination.
The tax preparer may contact the Internal Revenue Service and request that the examination be
discontinued under the repeat examination rule.
The tax preparer must submit to the examination because the repeat examination rule pertains to the 3
preceding years. - Answer -The tax preparer may contact the Internal Revenue Service and request that
the examination be discontinued under the repeat examination rule.
Publication 556, page 4, provides insight into the issue of repeat examinations. In particular, the IRS tries
to avoid repeat examinations of the same items, but sometimes this happens. If a taxpayer's tax return
was examined for the same items in either of the 2 previous years and no change was proposed to the
taxpayer's tax liability, the taxpayer should contact the IRS as soon as possible to see if the examination
should be discontinued.
Publication 556Page 4
1A #100859
Which of the following situations will disqualify a single individual from claiming the premium tax credit?
Marriage to an individual enrolled in a qualified health plan
Increase in household income to 390% of the federal poverty line
Inheritance of $1,100,000 received during the tax year
Becoming eligible as a dependent on their parent's joint tax return - Answer -Becoming eligible as a
dependent on their parent's joint tax return
Publication 974, page 4, states that a taxpayer can take the PTC for 2023 if the taxpayer for at least 1
month of the year, meets all of the following:
, An individual in the taxpayer's tax family was enrolled in a qualified health plan offered through the
Marketplace on the first day of the month; and
That individual was not eligible for minimum eligible coverage (MEC) for the month, other than
individual market coverage; and
The portion of the enrollment premiums for the month for which the taxpayer is responsible was paid
by the due date of their tax return (not including extensions).
In addition,
The applicable taxpayer's household income is at least 100% but no more than 400% of the poverty line
for their family; and
No one can claim the taxpayer as a dependent on a tax return for 2023; and
If married by the end of the year, they must generally file a joint tax return.
Since cash inheritances are not counted, the correct response for this question is that the individual
cannot become eligible as a dependent on their parent's tax return.
Publication 974Page 4
1A #100029
To meet the dependency test of "gross income," the taxpayer had to consider the following income
received by his mother, who was 81 years of age: Social Security $3,600, municipal bond interest $2,200,
corporate bond interest $1,300, stock dividends $900, rental income $1,500, rental expenses $200, and
wages $600. The mother lived with the taxpayer the entire year. What is the correct gross income of the
mother for this test? - Answer -$4,300
To meet the gross income test, a person's gross income for the year must be less than $4,700 in 2023
(which is the exemption amount) even though the personal and dependent exemptions are zero for
years 2018 through 2025. Gross income is defined on page 34 of Publication 17 as all income in the form
of money, property, and services that is not exempt from tax.
In a manufacturing, merchandising, or mining business, gross income is the total net sales minus the
cost of goods sold, plus any miscellaneous income from the business. In the case of rental property,
gross receipts are gross income. Do not deduct taxes, repairs, etc. to determine the gross income from
rental property.
Gross income also includes all taxable unemployment compensation, taxable Social Security benefits,
and certain scholarship and fellowship grants.
Tax-exempt income, such as tax-exempt income or untaxable Social Security payments, is not included
in gross income. To determine whether Social Security benefits are taxable, the sum of one half of Social
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