New PassKey Book Editions Cover Reveal 2023-2024 Testing Cycle

posted Feb 13, 11:20 am (107 days ago), permalink

The next EA Exam cycle begins May 1, 2023; here's a sneak peek of PassKey EA Review's new textbook editions!

New PassKey EA Review Textbook Cover reveal 2023-24

How long should I keep tax records? The answer might surprise you!

posted Dec 24, 3:30 pm (157 days ago), permalink

Clients ask: How long should I keep tax records? I USED to say six years, but now I scan everything and keep the records forever on an external drive. If you think that's overkill, two recent cases the Tax Court might change your mind. In Amos v. Comm’r (2022, link below), a net operating loss was disallowed because the taxpayer didn't have 20-year-old records to prove the carryover.

In Seaview Trading, LLC v. Commissioner, also decided in 2022, was about a 2001 tax return (yes, 20 years old) that the IRS "displaced" but the company had proof that they had mailed it, then submitted it again to an IRS examiner that asked for it after they lost it the first time. By keeping records, Seaview was able to show that the IRS blew the statute to assess additional tax.

California also has a 20 year collection statute, and I just personally saw a sales tax assessment from CA that was 19 years old on a dissolved business. Better to be safe than sorry, especially as these agencies get more aggressive.

See a great overview on Freeman Law: 

Tax Court in Brief | Amos v. Comm’r | Net Operating Loss Deductions Denied; Penalties Proper



How to Pass The IRS EA Exam in Less than 60 Days!

posted Dec 12, 9:43 am (170 days ago), permalink

Our user Ran Chen explains how he passed all three parts of the EA Exam with PassKey in 40 days (check out Ran's fantastic charts!). You can read more stories like this in our EA Exam study forum!


Hi, thank you all for providing such a great service, I just passed all three within 40 days, and I want to share with you how I did it. 

My background: I have zero experience in Tax. I am an engineer and moved to the US a few years ago. All my taxes are done through Turbo Tax where I only have w2, mortgage, INT, DIV, capital gain, and nothing else. A few months ago I started to research the financial planning domain, and I found EA is a good start for me that's why I decide to do it. I have a daytime job, so my study is done part-time.


Joined Passkey: Oct 26, 2022
Pass Part 1: Nov 7th (11 days)
Pass Part 2: Nov 23rd (15 days)
Pass Part 3: Dec 5th (11 days)

The major reason I choose Passkey is that I found everyone is recommending their books, and then I google it and found the service, and it provides subscription mode! that's my favorite. 

How I studied

My general method is to go through all videos once (1.5x speed, otherwise I could not focus), 2-3 videos per day, go through slides once, take the practice exam 30-50 times, take the timed exam once, store all the wrong answers and go through it multiple times. I didn't read through the book.

Part 1

Practice Exam: 43 times. Average Score: 73%. Timed Exam: 79%.

Ran Chen Testimonial part 1 Chart

Part 2

Practice Exam: 40 times. Average Score: 76%. Timed Exam: 82%.

Ran Chen Testimonial part 2 Chart

Part 3

Practice Exam: 36 times. Average Score: 81%. Timed Exam: 92%.

Ran Chen Testimonial part 3 Chart


The graphs above are drawn by myself with Google Spreadsheet. I love to record the data and analyze it. 

IRS Exam

The SEE Exam is more detailed than the exam in Passkey, however, since it's scaled based on how other people answer the questions, it's harder, but you might get better scores.

Here is the comparison I have:

The difficulty for me to remember and understand: 1 > 2 > 3

Scores I got in Passkey (high to low):  3 > 2 > 1

Scores I got from the SEE exam (high to low): 2 > 3 > 1 (doesn't quite align with the offline test)

Overall, in Part 1 there are too many things to remember, and I found it most challenging to me. Part 3 everyone says they are easy, but in the real exam, there are also lots of details (like years) I didn't recall. Part 2 is just okay to me.


That's it, I feel I am lucky and wish everyone good luck as well. Thank you all for providing such a great service!

Ran Chen Testimonial

Requesting a Penalty Abatement from the IRS Using Reasonable Cause

posted Nov 3, 1:50 pm (209 days ago), permalink

Requesting a Penalty Abatement from the IRS Using Reasonable Cause

In this video, we discuss penalty abatement for individual taxpayers using reasonable cause.

Handout: /files/1388313/Understanding_How_to_Abate_IRS_Penalties_HANDOUT(2).pdf

The full video is available on PassKey Online as a webinar in the Bonus Videos section. 

  • The failure-to-file (FTF) penalty
  • The failure-to-pay (FTP) penalty
  • Accuracy-Related 
  • Failure to Deposit Underpayment of Estimated Tax by Individuals
  • Other penalties 

Congratulations Dan C. on Passing all three parts of the EA Exam in October!

posted Oct 21, 11:45 am (222 days ago), permalink


My name is Dan. I have been a full time remote tax preparer for about 1.5 years in a small NYC high-volume firm. In 2022, I have prepped rough 600 returns, spread through 1040s, 1065s and 1120s(s), plus 1 or 2 1120s. 

The brief of this story is: On September 24th, I flew 3,000 miles to one of the International centers city, sat for part 1 on 10/4, part 2 on 10/10 and part 3 on 10/20. Somehow managed to pass all three and score 3s in each topic for all tests (evidence attached LOL). 

In late 2018, I accidentally applied for a virtual assistant role a my current firm, not knowing anything about taxes. What followed was intense interest > taking  masters degree level certificate course in Federal Taxation > Participating in the 2021 AFSP program> and here we are as an EA. 

I have used Passkey's vids and test banks for the last 4 months and the service is absolutely the real deal. I had other workbooks (like 2000 pages) in addition to working under 2 wonderful CPA. My personal and professional opinion about the program is that it belong to the top shelf. After going through nearly the full test bank (yes, I did like 1500 questions for each part), I can reasonably so that passkey is the key to passing. Do I need to add? nope

To the entire Passkey team, receive my gratitude and keep up the good work. 

Asante/Gracias/Danke/Obigado/Shukran/Namaste/Merci/ Thank you.

Dan C Testimonial

Free Circular 230 ethics course: Thursday, November 10, 2022

posted Oct 20, 12:15 pm (223 days ago), permalink

Free Stakeholder Circular 230 Course! November 10, 2022. This course satisfies the 2 hour annual ethics requirement for AFSPs and EAs! Free Ethics courses for EAs are hard to find, so sign up before this CE course fills up completely!

Thursday, November 10, 2022

  • 2:00 p.m. Eastern,
  • 1:00 p.m. Central,
  • 12:00 p.m. Arizona and Mountain,
  • 11:00 a.m. Pacific, 10:00 a.m.
  • Alaska, 8:00 a.m. Hawaii
  • (120 minutes)

This free webinar will cover the following:

  • Tax Engagement Lifecycle Framework for Regulating Practice before the Internal Revenue Service
  • How Circular 230 Applies throughout the Tax Engagement Lifecycle and Best Practices for Practicing Inside the Lines
  • OPR Disciplinary Process Contact Information and Resources
  • Plus, a live Q & A

Offered with closed captioning. Closed Captioning displays the words that descrbe the audio portion of the program for viewers who are deaf or hard of hearing. Captions are available in English only. All participants who qualify will receive a Certificate of Completion.

Tax Professionals - Earn up to 2 CE Credits.

Category: Ethics

IRS Stakeholder Liaison is an IRS Return Preparer Office Approved CE Provider for Enrolled Agents and Other Tax Return Preparers with valid PTINs and is not NASBA or MCLE accredited. CPAs, attorneys and others licensed by state boards/organizations should check with their respective boards/organizations to determine if credit applies toward their continuing education requirements.  



Circular 230 course free



Congratulations Surendra!

posted Oct 12, 11:54 am (231 days ago), permalink

Congratulations to  Surendra Tiwari on passing all three parts of the EA exam! Welcome to the enrolled agent club, we are happy to have you!
Share your success stories with us!

Passed all three parts testimonial

What happens when a tax refund gets deposited into the wrong bank account?

posted Sep 27, 12:09 pm (246 days ago), permalink

What happens when a tax refund gets deposited

What happens when a tax refund gets deposited into the wrong bank account?

QUESTION: What happens when a tax preparer enters incorrect Direct Deposit information, and the tax refund gets deposited into the wrong bank account?

ANSWER: It becomes a civil issue between the bank, the client, and the preparer. This is the biggest drawback to direct deposit! If the tax preparer makes an error on the bank account number then it becomes a civil issue, and the IRS essentially washes its hands of the matter. By contrast, a lost or misrouted IRS refund check is easy to replace. Source:

SOLUTION: ALWAYS have the client double-check and initial their direct deposit information. Every. Single. Year.


How To Grow Your Professional Network With Free Social Media Business Pages

posted Sep 21, 4:41 pm (251 days ago), permalink

Create Your Own Social Media Network

If you have a business as a tax preparer or a bookkeeper, (even if it's just a side gig) we suggest setting up Social Media pages for your business (separate from your personal page). Where you can post tax-related content that will engage your clients and potential new customers. These social media pages are all free to create. We suggest Canva to help you create easy images and templates for your social media content, (free accounts are available). 

Here are links to PassKey's Social Media pages, so you can get an idea of what we mean. Free accounts can be made on all these platforms to help promote your business. 

Follow us, and join the conversation!

User Question: Understanding the Estate Tax and the Aggregate Limit

posted Jul 31, 6:03 pm (303 days ago), permalink

estate tax return IRS forum slide slide

This fantastic question about the estate tax came from Richie Phillips, one of our forum users. 

 From Richie Phillips

If an individual gives multiple gifts of less than the exclusion amount over their lifetime, do each of these gifts still count toward the aggregate exclusion amount for estate tax?

For example, an individual taxpayer gives gifts to 1,000 people of $15,000 each. This is an aggregate total of $15,000,000. Since each gift was below the annual exclusion amount, does it matter that the aggregate total is above the $11.7 Million aggregate exclusion amount? Or will the taxpayer owe estate taxes on $3.3Million, the amount over the Estate exclusion limit? Hope this question makes sense.

Trying to wrap head around this. Thanks in advance.

From Christy Pinheiro 

Hi Richie, I understand what you are asking.

That $15,000 annual gift is not reportable, and does not count against the aggregate "lifetime" limit. We are talking about the ESTATE and GIFT tax, (not the income tax, now). The ESTATE tax is a tax on the transfer of property.

Congress basically does not want wealthy people to gift huge assets at the very end of their lives in order to distribute the majority of their estate to their family and friends and escape the estate tax. Whether you think this is right or wrong, it's just the way it is, and many wealthy people actually do NOT do any estate planning until it is too late, or they are in hospice, or whatever. In that case, it does make it much more difficult for the truly wealthy to avoid the estate tax and distribute assets to their loved ones. 

Now, if you happen to die and do not have assets even close to that $15 million limit, then none of this really matters.

But let's say I own valuable real estate, plus I have a lot of money and investments and also a valuable company and now my estate is worth more than $15,000,000. I want to make sure I distribute as much as I can to my family, tax-free to them, and non-reportable, so it does not count against my estate tax exclusion. 

I can give up to $15,000, in cash, every year, to any human I want, family or friends, and that never has to be reported anywhere. It is also not taxable to the recipient. So, let's say I want to transfer as much as I can to my brother, and by extension, my nieces and nephews, tax-free, and I do NOT want it to count against my lifetime exclusion. That's where estate tax planning comes in. 

My brother is married and has three kids. Okay, so I can give my brother and his family $75,000 in 2022 and nothing has to be reported anywhere ($15,000 X 5 people [my brother, his wife, and his three kids) all by giving them each separate checks, because they are all individual humans. Now, I am also married, so I could (potentially) ask my husband to write separate checks out of our joint account totaling $75,000 (once again, $15,000 each) and that, also would not be reported anywhere.

That means, that if my husband and I both write separate checks, we could potentially gift my brother's family $150,000 EVERY SINGLE YEAR, tax-free, and nonreportable, and that would not count against my gift/estate lifetime limit ($15,000 annual gift limit x 5 family members x 2 [me and the hubby]). 

Because each person is allowed to gift another person $15,000, every single year, and that is completely legal and does not have to be reported as a reportable gift. I can also increase this amount by offering to pay for my nephew's and niece's college education or any medical expenses, and as long as I make those payments directly to the college or the medical institution, that doesn't have to be reported, either. 

And yes, as you mentioned in your own example, if I wanted to gift 1,000 total strangers $15,000 each in 2022, that would be completely legal, not taxable to the donee, and not reportable by me (the donor). 

Realistically, though, wealthy people do not want to give 1,000 gifts to total strangers. What they want to do (and what most of us want to do, too) is to gift as many assets as possible to our children, or other very close relatives, like our parents or siblings.

This can easily be done, if it is done yearly, carefully, and consistently, (as I mentioned in the example above, with my brother), then wealth transfers can be made, but it has to be done with care, and annually. Not all at once when you get some terrible diagnosis, which unfortunately is how we see so many people who are just upper middle class get hit with the estate tax. Maybe they own valuable farmland, or even something as innocuous as 2 houses in the Bay Area, or Silicon Valley! And now their estate is over the limit.

This type of tax planning is so important to do BEFORE it is too late. But I digress. I hope this helps your understanding of a very, very complicated topic. 

~Christy Pinheiro, EA ABA

You can learn more about the estate tax, gift tax, and income tax by joining PassKey Online, and participating in our forums!

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