How the Enrolled Agent Exam Was Quite Different Back in My Day

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I never really gave it much thought before, but at age 44, I’m actually considered an old-timer in the business. I was reminded of this recently when one of our bookkeepers decided that she was going to take the Special Enrollment Examination, the test that individuals take to become an enrolled agent.

She explained what the exam is like today, and I was shocked. I knew that the test had been changed, but honestly, after I passed that sucker, I never, ever wanted to hear about it again. Almost 17 years later, it still sends a chill down my spine.

I passed the exam in 2000; however, that was not the first time I took it. My first attempt was in 1999, and I passed three out of four parts of the exam. I had to retake Part 1 in 2000. That test was a two-day, four-part exam. Part 1 was Individuals, Part 2 was Sole-Proprietorships and Partnerships, Part 3 was Corporations and S Corporations, and Part 4 was Retirement Plans, Trusts, Estates, and Ethics. 

In 1999, you had to take all four parts at the same time. You had to pass at least two parts of each to not have to retake that part of the exam. You had to study for all four parts of the exam at the same time. In addition, the test was given only once a year in the fall.

You would get your results about four to five months after you took the test. The exam was so hard that when you got your results, you would see that about 10 percent of the questions were thrown out because they had no answer, about 5 percent of the questions had more than one answer, and the test was graded on a curve so you never knew what the passing score was.

Did I mention that you couldn’t use calculators? That’s right. I had to figure out complex installment sales by hand.

Each part, except for Part 4, had 100 questions. There were true and false questions that were worth one point, multiple-choice questions that were worth two points, and finally, multiple-choice questions that you had to mathematically figure out for three points. I believe Part 4 had 75 questions and they were all true and false. 

I realized real quick that I had to be smart about how to take the exam. When the test started, I went directly to the questions worth three points while I was fresh and got those out of the way. I then did the questions that were worth two points, and then finished with the questions worth one point. 

The study prep was from the end of tax season up until testing day. It took that long to study for the exam. In those days, we were tested on every exception to tax law. For instance, you’d have to know what the law is, and then you’d have about 15 detailed exceptions to the law. The test would include questions about one of the exceptions, so you had to know your stuff. When I took the test, the pass rate was only 30 percent. Today, it’s at 60 percent.

When our bookkeeper told me about the exam today, I was floored. First of all, the IRS no longer administers the exam. Secondly, there are only three parts, and you can take the test part by part until you pass the exam. Thirdly, you can use a calculator! Finally, I talked to four different people who took the test in 2005 before it was changed, failed the exam, and had to retake it in 2006 when the changes first went into effect. They all said the exam was so much easier. 

What does all of this mean? It just means that I have become my father because I’m talking about how kids today have it so much easier. No, I didn’t walk three miles, uphill both ways, in the snow to school barefoot, but I did take the enrolled agent exam when it was a much more vigorous test.

When I complained about this in a National Association of Enrolled Agents group on Facebook, I was met with responses like: “That is old news” and “I bet you couldn’t pass the new exam.” I took the guy up on passing the test. I told him if he pays for it, I will happily take the exam. Why not? You get CPE for it.

About Craig W. Smalley, EA

Craig Smalley

Craig W. Smalley, MST, EA, has been in practice since 1994. He has been admitted to practice before the IRS as an enrolled agent and has a master's in taxation. He is well-versed in US tax law and US Tax Court cases. He specializes in taxation, entity structuring and restructuring, corporations, partnerships, and individual taxation, as well as representation before the IRS regarding negotiations, audits, and appeals. In his many years of practice, he has been exposed to a variety of businesses and has an excellent knowledge of most industries. He is the CEO and co-founder of CWSEAPA PLLC and Tax Crisis Center LLC; both business have locations in Florida, Delaware, and Nevada. Craig is the current Google small business accounting advisor for the Google Small Business Community. He is a contributor to AccountingWEB and Accounting Today, and has had 12 books published on various topics in taxation. His articles have also been featured in the Chicago Tribune, New York Times, Yahoo Finance, Nasdaq, and several other newspapers, periodicals, and magazines. He has been interviewed and been a featured guest on many radio shows and podcasts. Finally, he is the co-host of Tax Avoidance is Legal, which is a nationally broadcast weekly Internet radio show.

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Mar 8th 2018 16:17

Craig, what do you think has changed with role of Enrolled Agents. I really think that it is more essential now given the need to differentiate value for tax purposes as well as gain. I see some EA test prep on surgent.com as well as surgentcpe.com. Any others you'd recommend?

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May 13th 2017 15:28

I think that the NAEA has done an amazing job in advertising EXACTLY what an EA is. I believe the role has changed because people are starting to look at us as tax professionals now

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May 17th 2017 01:56

I took and passed that gruesome exam in September 1990. Up to then - 1990 had the lowest percent of passing all four parts. I was ecstatic when I received my letter of passing in January 1991. The 3rd part I passed with 1 point.

The test is easier to pass now - and I think that is a good thing. People just starting out know they have a lot more to learn.

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May 17th 2017 12:41

I don't know if it should be easier like it is today. I am kinda on the fence. Back then at least we could tell CPAs that they couldn't pass the exam, and it was true

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May 17th 2017 19:26

The only thing I would add....is it may be easier, and based on what you stated, it appears to be. However, it is not easy. Especially SEEII. They cram so much into those 100 questions for that test. If anything, it should be split into 2 tests instead of one.

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May 18th 2017 14:57

Just imagine taking all parts, and there were four, at the same time, over two days once a year

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By RitaE
Jun 5th 2017 21:36

Craig,
You brought back some memories that I wanted to forget about taking the exam. I also wanted to add that the test was only given in select cities back then as well. I had to travel to the nearest test site which was McCormick Place in Chicago, IL. I was one of hundreds taking the exam in the big room at McCormick Place. I only passed 3 parts on my first try. I missed passing the remaining part by just a couple of points. I studied even harder the next year because I wasn't going to fail getting my E.A. over one stinking part. And, I do remember the wait for the results and the wait for the background check to taking an agonizingly long time.
Last summer, I helped write questions for this latest revision of part 1 questions and I think it is much easier than when I took the exam. The IRS does not necessarily want an easy exam but they do feel that it should be easy enough to pass if you study and have a few years of tax preparation under your belt. The fact that you can now use a calculator and take one part at a time at a local testing center takes away a lot of the unnecessary pressure when taking the exam.

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