Increased User Fee for Special Enrollment Exam Adopted (T.D. 9820)

The IRS has adopted final regulations that increase the user fee for the Enrolled Agent Special Enrollment Examination (EE-SEE) to become an enrolled agent. The EE-SEE is a three-part examination, and the user fee is being increased per part from $11 to $81, effective for examinees who register on or after March 1, 2018, to take the EA-SEE. In addition to the user fee charged by the IRS, there is an additional fee charged by the contractor administering the examination, which was $98 per part for the May 2016 to February 2017 testing period, and remains at $100.94 for the March 2017 to February 2019 testing period, and $103.97 for the March 2019 to February 2020 testing period. According to the IRS, the increased user fee resulted from a rise in costs associated with the examination since it was last increased in 2006, which is attributable to the increased cost for background checks, the decreased number of parts of the EA-SEE being administered, and the increase in the IRS’s costs of verifying the contractor’s compliance with the information technology security requirements needed to protect the personal information of individuals taking the EA-SEE.

The IRS noted that all of the comments it received opposed increasing the user fee for the EA-SEE. In particular, commentors expressed concern that the increased user fee would discourage individuals from becoming enrolled agents. It was suggested that the IRS should endeavor to increase the number of individuals taking the EA-SEE each year and concentrate on encouraging unenrolled preparers, in particular, those who participate in the Annual Filing Season Program (AFSP), as described in Rev. Proc. 2014-42, to become enrolled agents. This would result in a reduced user fee on a per-part basis when the IRS redetermines the cost of the EA-SEE at the next biennial review of the user fee.

The IRS responded that both the Treasury Department and the Service have considered the potential impact on the number of individuals if the full cost of the EA-SEE program is collected and concluded not to seek an exemption to the full-cost requirement. The IRS also noted that efforts to improve unenrolled preparers’ knowledge of federal tax law, including implementation of the AFSP, have not substantially affected the number of individuals taking the EA-SEE and have no direct relationship with the user fee.

T.D. 9820, 2017FED ¶47,017

T.D. 9820, FINH ¶43,159

Other References:

31 CFR Part 10

CCH Reference – 2017FED ¶43,775

CCH Reference – FINH ¶23,333

Tax Research Consultant

CCH Reference – TRC IRS: 3,204.10

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CCHTaxGroup

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