The National Association of Enrolled Agents has challenged a proposed ninefold increase to the fee charged by the Internal Revenue Service for the Special Enrollment Exam, a three-part test required to earn the enrolled agent credential.

“An increase from $11 per part to $99 per part would nearly double the cost of each section of the SEE and explode the cost of taking each section to just south of $200,” Robert Kerr, NAEA senior director of government relations, testified at the IRS public hearing regarding Special Enrollment Examination User Fee Proposed Regulations (REG-134122-15).

“We have no idea how the IRS is managing these costs, what it is doing to drive down the costs and whether the costs the IRS is incurring are necessary,” Kerr said.

NAEA president Terry Durkin also requested that the IRS share the costing models or methodology used to derive the user fees, but as of today NAEA has not received that information. Without this information, it is difficult to determine whether or not the increase is actually necessary.

“IRS is in possession of an asset – the EA credential – that is grossly underleveraged,” said Kerr. “If IRS increased the number of SEE parts administered in any given year, then, all things being equal, the agency’s user fee per part would decrease. To that end, we wonder what IRS has done to grow the number of aspiring tax professionals who elect to take the SEE. Again, we wonder how IRS is trying to drive down the costs to SEE takers.”

Kerr expressed concern that raising the exam fee dramatically might discourage tax professionals from taking the test and earning the EA credential, resulting in more unqualified return preparers in the tax profession. 

In a previous letter, commenting on the proposed increase, the NAEA noted that the IRS claims three increased costs in the proposed regulations: the cost for background checks for individuals working at the contractors’ testing centers; a significant reduction in the number of parts of the SEE that will be administered annually; and the service’s costs of verifying contractors’ compliance with IT security requirements.

An NAEA request for the IRS costing models and methodology has received no response, the group claims.

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