What if I am audited for my Enrolled Agent CE compliance?
The IRS randomly selects Enrolled Agents for CE audits every year.
If you are audited, it will usually occur in the July/August/September timeframe of the year your Form 8554 renewal was due.
Example: if your social security number ends in 0, 1, 2 or 3, your renewal form was due by January 31, 2016 and this renewal became effective April 1, 2016.
Your audit would most likely occur July/August/September of 2016.
A CE audit covers the prior 3 year reporting cycle, so in the above example it would include CE reported for years 2013, 2014 and 2015.
The IRS generally asks you to provide copies of your certificates of completion for any hours claimed on your renewal Form 8554. This is why it is important to keep copies of your certificates in your files. If you took your courses from FunCPE, you can login to the course system at any time and reprint your certificates, even after your courses expire.
The IRS also cross-checks your CE certificates to the CE reported to your PTIN account. This is why you should verify that each CE course you take is posted to your PTIN account.
We occasionally have students that mistype their name or PTIN when registering, which causes the CE posting to be rejected. We immediately attempt to contact the student, but sometimes the student has used a secondary email account that they don't check frequently, and they never get back to us with the corrected information. As a result, we are unable to post the hours to their PTIN account.
What the IRS is looking for
The IRS will verify that your continuing education courses:
- covered the acceptable subjects of Federal Tax and ethics,
- meet the minimum hours requirement of 16 hours minimum per year, 72 hours total per 3 year renewal period, with 2 hours of ethics per year, and
- were taken from an approved IRS CE sponsor.
What if I do not pass the CE audit?
If you are unable to prove that you have completed the minimum required CE, the IRS will most likely place you on inactive status. You will then have to follow the procedures to move from inactive to active status .
Most Enrolled Agents pass their CE audit without problems and it's a fairly simple process. The main thing to remember is: (1) keep copies of your certificates in your own files and verify that your CE couses are posted to your PTIN account.