UUS Practice Tests⌕ Search
Tax Professional

IRS Special Enrollment Examination Part 3 - Representation, Practices and Procedures Practice Test

Part 3 focuses on representing taxpayers before the IRS and applying the rules that govern tax practice. The subject matter includes responding to IRS notices, preparing for conferences, handling examination requests, advising on collection options, and meeting paid-preparer duties. These tasks require sound judgment about deadlines, client interests, records, and the limits of a practitioner’s authority.

Exam overview

Exam providerInternal Revenue Service
Exam codeNot listed
CategoryTax Professional

About the IRS Special Enrollment Examination Part 3 - Representation, Practi… Exam

Representation work involves evaluating a taxpayer’s position, explaining available choices, and communicating with IRS personnel on the client’s behalf. Practitioners need to distinguish an information request from a demand that may raise questions about authorization or privilege, organize relevant records, and prepare evidence for conferences. Collection matters call for assessing proposals such as installment agreements against the taxpayer’s ability to pay before recommending a response. Practice responsibilities also include deciding whether there is enough information to sign a return, maintaining required preparer records, and retaining copies of returns and supporting workpapers. The practice material presents scenarios involving these decisions, including notice deadlines, withdrawal from representation, return accuracy, and client communication.

Sample Practice Questions

Review a selection from this exam's published US Practice Tests practice bank.

Question 1

A practitioner receives a proposed IRS installment agreement that would require payments the client cannot reasonably make. What should the practitioner generally do before advising the client to accept it?

  1. AReview the client’s financial circumstances and the proposal’s terms
  2. BTell the client to accept immediately because IRS proposals cannot be changed
  3. CAdvise the client to stop communicating with the IRS
  4. DAssume the proposed payment amount is based on verified current financial information
Show answerCorrect answer: A

The practitioner should understand the client’s financial situation and review the agreement’s payment amount, duration, and other terms before advising. Depending on the facts, the client may be able to request a different arrangement or provide updated financial information.

Question 2

A taxpayer receives an IRS notice with a response deadline. The taxpayer believes the notice is mistaken and asks the representative whether to ignore it. What should the representative advise?

  1. AIgnore it because an incorrect notice will automatically disappear
  2. BReview the notice promptly and respond or take other appropriate action by the stated deadline
  3. CWait until the IRS sends a final collection notice before acting
  4. DDestroy the notice to avoid confusion
Show answerCorrect answer: B

IRS notices often include deadlines for providing information or preserving review rights. Promptly reviewing the notice and taking an appropriate action helps avoid unnecessary escalation or loss of procedural opportunities.

Question 3

A practitioner is asked by a client to keep a copy of a signed tax return and supporting workpapers. Which statement is generally accurate?

  1. AThe practitioner should maintain records in accordance with applicable retention requirements and reasonable professional practices.
  2. BThe practitioner must destroy all copies as soon as the return is filed.
  3. CThe practitioner may keep the records indefinitely without regard to privacy or security.
  4. DThe practitioner should retain only the client’s bank account number.
Show answerCorrect answer: A

Practitioners should retain required records for the periods prescribed by applicable rules and follow sound professional recordkeeping practices. Retained taxpayer information should remain protected, and retention should not be treated as permission to keep sensitive data without a legitimate need.

Question 4

A practitioner prepares a federal tax return for compensation. Which recordkeeping practice is generally required under federal preparer rules?

  1. AKeep a complete copy of the return or a record of the return’s information, along with required identifying information, for the prescribed retention period
  2. BKeep only the client’s original documents until the IRS processes the return
  3. CDestroy all return information as soon as the client receives a copy
  4. DRetain records only if the client has an unpaid tax balance
Show answerCorrect answer: A

Paid preparers generally must retain a copy of each return or a record of its required information, including prescribed taxpayer and preparer details, for the applicable retention period. This supports compliance and potential review.

Question 5

A taxpayer asks a representative to request an extension of time to pay an assessed balance. Which statement is generally accurate?

  1. AAn extension to pay, if granted, generally does not eliminate interest accruing on the unpaid balance
  2. BA request for more time to pay automatically cancels the assessment
  3. CInterest stops as soon as the taxpayer appoints a representative
  4. DAn extension to pay means no payment will ever be due
Show answerCorrect answer: A

Additional time to pay generally does not erase the tax debt, and interest commonly continues to accrue on unpaid tax. Penalty treatment can depend on the circumstances and applicable rules, so the representative should explain the consequences of the specific arrangement.

Question 6

A practitioner is asked to sign a tax return as a paid preparer but has not reviewed the return and lacks enough information to determine whether it is accurate. What should the practitioner do?

  1. ASign it because the taxpayer has certified the information.
  2. BSign it only if the taxpayer agrees to accept all responsibility.
  3. CObtain and review sufficient information to meet the practitioner’s obligations, or decline to sign.
  4. DSign it and add a note that the practitioner did not verify the figures.
Show answerCorrect answer: C

A paid preparer must satisfy applicable standards before signing a return. A taxpayer’s certification does not eliminate the preparer’s duty to make appropriate inquiries and avoid signing a return the preparer cannot responsibly support.

Question 7

A representative is preparing for an IRS conference and believes a key document supports the taxpayer’s position. What is the most useful preparation step?

  1. AOrganize the document with a concise explanation of how it relates to the disputed issue
  2. BSubmit every document in the taxpayer’s possession without review
  3. CWait until the conference to determine what issue is being discussed
  4. DAlter the document to make the relevant information easier to see
Show answerCorrect answer: A

Organizing relevant evidence and connecting it clearly to the issue helps the IRS understand the taxpayer’s position. The representative should preserve the document accurately and avoid unnecessary, unreviewed submissions or alterations.

How to use this practice test

Access is free. The bank contains 50 published practice questions; each session presents up to 20 random questions. Results appear after the session, so use them to identify which representation decisions or practitioner duties need further review.

Preparation tips

  • For notice scenarios, identify the response deadline and consider the appropriate way to contest or clarify the IRS position rather than disregarding the notice.
  • Practice evaluating installment agreement proposals against a client’s realistic ability to make payments before advising acceptance.
  • For examination requests, check the representative’s authorization and the request’s scope; identify possible privilege concerns before disclosing records.
  • Review paid-preparer duties by distinguishing when a practitioner can sign a return from situations requiring more information or further review.
  • Organize conference preparation around the disputed issue, supporting documents, and a clear explanation of how the evidence supports the taxpayer’s position.
Official sourceOfficial exam page ↗