Enrolled Agent - Part 1 Section 1 Exam Questions with Correct Answers
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Course
EA - Enrolled Agent
Institution
EA - Enrolled Agent
1A #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 busin...
Enrolled Agent - Part 1 Section 1 Exam
Questions with Correct Answers
1A #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
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