Enrolled Agent Examination Topics – Part 2 Businesses (100 items)
Section 1: Businesses (45 items)
Section 2: Business Financial Information (40 items)
Section 3: Specialized Returns and Tax Payers (15 items)
Section 1: Businesses (45 items)
Business entities
Types of business entities and their filing requirements:
Sole proprietorships
Partnerships
Corporations
S corporations
Farmers
LLCs
Tax-exempt companies and associations
Elections for type of entity
Employer identification number
Accounting periods (tax year)
Accounting methods
Partnerships
Partnership income, expenses, distributions, and flow-through (e.g, self employment
income)
Family partnerships
Partner’s dealings with partnership (e.g., exchange of property, guaranteed payment,
contribution of property to partnership)
Basis of partner’s interest
Disposition of partner’s interest
Corporations in general
Filing requirements and due dates
Earnings and profits
Shareholder dividends (definition and reporting requirements)
Special deductions (e.g., dividends received deductions, charitable deduction).
Reconciling books to return (e.g., Schedule M series)
Distributions and recognition requirements
Liquidations and stock redemptions
Forming a corporation
Services rendered to a corporation in return for stock
IRC section 351 exchange
Transfer of money or property; receipt of money or property in addition to the stock of that
corporation
Mortgaged property transferred
Exchange of property other than a IRC section 351 exchange
Controlled groups
Closely held corporations
Personal service corporations (e.g., 35% rate)
S corporations
Requirements to qualify including election procedure (e.g, Form 2553 election ,
attachment to return)
Tax law related to S corporation
Treatment of distributions
Shareholder’s basis (e.g, loan basis)
Status (e.g., terminated and reinstated)
Debt discharge
Non-cash distributions
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Section 2: Business Financial Information (40 items)
Business income
Gross business income
Cost of goods sold (e.g., inventory practices, expenditures included, uniform
capitalization rule)
Net income, net operating losses, and loss limitations including passive activity and at
risk limitations
Gain or loss on disposition of depreciable property
Business expenses, deductions and credits
Employees’ pay (e.g., deductibility of compensation, fringe benefits, rules of family
employment, statutory employee, necessary and reasonable)
Reporting requirements for company employees (W-2, W-4, Form 1099)
Business rental deduction
Depreciation, amortization, IRC section 179, and depletion
Business bad debts
Business travel, entertainment, and gift expenses
Interest expense
Insurance expense
Taxes (e.g., deductibility of taxes, assessments, and penalties; proper treatment of sales
taxes paid)
Employment taxes
Federal excise tax
Casualties, thefts, and condemnations
IRC section 199 deduction (domestic production activities)
Eligibility and deductibility of general business credits (e.g., welfare-to-work credit,
disabled access credit, investment credit)
Business assets
Basis of assets
Disposition of depreciable property
Like kind exchange
Analysis of financial records
What type of business (e.g., service, retail, manufacturer, or farm)
Income statement
Balance sheet
Method of accounting (e.g., accrual ,cash, hybrid, OCBOA)
Depreciation and amortization
Depreciation recovery (e.g., recapture, Sec 280F)
Determination of basis of assets
Shareholder/partner basis
Pass-through activity (e.g., K-1)
Proofing beginning and ending balances
Reconciliation of tax versus books (e.g., M-1, M-2)
Related party activity
Advising the business taxpayer
Filing obligations (e.g., extended returns)
Depositing obligations (e.g., employment tax, excise tax)
Reporting obligations for businesses (e.g. IRC sections 1099 and 1031 exchanges)
Record-keeping requirements (mileage log, cell phone usage, accountable plans)
Related party transactions
Definitions of business entities
Client habits (e.g., personal usage of business accounts, separation of business and
personal accounts)
Benefits and detriments of choosing each type of business entity
Advice on accounting methods and procedures (e.g, explanation of requirements)
Transfer elections in or out of the business (e.g., contributed property, distributions)
Life cycle of the business (e.g., startup, decline)
Type of industry (e.g., personal service corporation)
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Section 3: Specialized Returns and Tax Payers (15 items)
Trust and estate income tax
Trust types (e.g., grantor, irrevocable, tax shelters)
Distributable net income
Exclusions and deductions
Fraudulent trusts
Income in respect of a decedent
Income
Exempt organizations
Filing requirements (e.g., 1023, 1024, Annual 990)
Qualifications for tax-exempt status (e.g., 501(c)(3))
Retirement plans
Employer contributions
Employee contributions and reporting requirements
Plans for self-employed persons
Prohibited transactions
Qualified plans
SEP and SIMPLE
Farmers
Farm inventory
Depreciation for farmers (e.g., special use)
Various disaster-area provisions
Disposition of farm assets
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To download IRS Forms, Instructions and Publications, click on the following link:
http://www.irs.gov/taxpros/agents/article/0,,id=109302,00.html
