What EA Part 2 Actually Tests

Part 2 of the Special Enrollment Examination (SEE) is the Businesses part. It is the middle exam in the three-part path to becoming an Enrolled Agent, and in my experience it is the one candidates underestimate the most. Part 1 covers Individuals and Part 3 covers Representation, Practices, and Procedures. Part 2 sits between them and packs in the widest range of technical detail.

The exam is written and owned by the IRS and delivered through a testing vendor. FreeFellow is independent and not connected to the IRS in any way. What I am sharing here is a candidate-to-candidate study plan, not guidance from the exam body.

At a high level, Part 2 asks you to know how different business entities are taxed, how to read and reconcile business financial information, and how a handful of specialized returns work. That last bucket (trusts, estates, exempt organizations, and retirement plans) is where a lot of people lose points because it feels like a grab bag of unrelated topics.

Exam Format and Scoring

Here is the structure you should plan around:

  • 100 multiple-choice questions total.
  • 85 of those are scored; 15 are experimental and do not count.
  • 3.5 hours of testing time (the full appointment is a bit longer with the tutorial and survey).
  • Scores are scaled, and 105 is the passing score. You either pass or you get a score with diagnostic feedback on weak areas.

Because you cannot tell which 15 questions are experimental, treat every question as if it counts. The multiple-choice format means there is no partial credit and no written response, so recognition and elimination skills matter as much as raw recall.

You have a three-year carryover: once you pass your first part, you have three years to pass the other two before the first credit expires. The testing year for the SEE typically runs from May through the end of February, with a blackout in March and April while content is updated. Confirm current dates before you schedule.

The Blueprint and Topic Weights

The IRS publishes a content outline for Part 2. It breaks into three domains. The exact weights shift a little over time, so verify against the current outline, but the shape has been stable:

  1. Business Entities and Considerations. This is the largest and most conceptual block. Sole proprietorships, partnerships, corporations, S corporations, and the formation, operation, and liquidation issues that go with each. Basis, distributions, and how income flows through to owners live here.

  2. Business Financial Information. Accounting methods and periods, business income, business expenses and deductions, cost recovery (depreciation, Section 179, bonus depreciation), and the treatment of assets. If you like numbers, this is the section where practice pays off fastest.

  3. Specialized Returns and Taxpayers. Trusts and estates (including fiduciary returns), exempt organizations, retirement plans, and farmers. It is a smaller slice of the exam but a common source of surprise questions.

My advice: do not spread your hours evenly. Weight your time toward entity taxation and financial information because they carry the most questions and the most interlocking rules.

Study Hours and a Sample Timeline

Plan for roughly 80 to 120 hours. If you prepare tax returns for businesses in your day job, the lower end is realistic. If your background is individual returns or you are new to tax, aim higher and give yourself a longer runway.

Here is a timeline I would use for a working candidate studying about 8 to 10 hours a week:

  • Weeks 1 to 3: Entities. Sole props and partnerships first, then C corps, then S corps. Build a one-page comparison chart of formation, basis, distributions, and loss limitations for each entity type. You will reuse it constantly.
  • Weeks 4 to 6: Financial information. Accounting methods, income and expense rules, and depreciation. Do a lot of small numerical problems here rather than reading.
  • Weeks 7 to 8: Specialized returns. Trusts, estates, exempt orgs, and retirement plans. Cover them briefly but do not skip them.
  • Weeks 9 to 10: Mixed review and timed practice. Full-length practice sets under a clock, then targeted cleanup on your weakest domain.

If you can only give the exam 5 hours a week, stretch this to 14 to 16 weeks rather than cramming.

A Practice Strategy That Works

Reading alone does not pass Part 2. The exam rewards pattern recognition on rules that look similar but differ by entity. I lean heavily on question banks for that reason.

My loop looks like this:

  1. Read a focused chunk (one entity type or one financial-information subtopic).
  2. Immediately do 20 to 40 questions on just that chunk.
  3. Review every miss and every lucky guess. Write one sentence on why the right answer is right.
  4. Once a domain feels solid, mix it into a cumulative set so you keep it fresh.

You can run this loop for free with the EA Part 2 question bank. Use the explanations to build your own note on each rule rather than just memorizing the answer letter.

In the final two weeks, switch to full-length timed blocks. You have about 2 minutes per question, and the goal is to make that pace automatic so test day feels like a normal practice session.

Common Mistakes I See

  • Treating Part 2 like Part 1. The individual-tax intuition does not transfer cleanly. Partnership and S corp basis rules trip up experienced individual preparers.
  • Skipping the specialized returns. It is a smaller domain, so people ignore it. Those are often free points you are leaving on the table.
  • Memorizing depreciation instead of practicing it. Cost recovery is procedural. You learn it by working problems, not rereading the rules.
  • No timed practice. Running out of time is avoidable. Simulate the clock at least three or four times before test day.
  • Ignoring diagnostic feedback on a retake. If you do not pass, the score report tells you which domains were weak. Rebuild your plan around those, do not just study everything again.

Putting It Together

Part 2 is beatable with a disciplined 80 to 120 hour plan, a strong entity-comparison framework, and a lot of active questions. Front-load the two big domains, do not neglect the specialized returns, and finish with timed full-length practice. Verify the current content outline and testing calendar with the IRS before you schedule, since weights and windows are updated periodically.

Frequently Asked Questions

What is the pass rate for EA Exam Part 2?

Part 2 (Businesses) is generally the toughest of the three parts. Reported pass rates vary by testing window but have often landed in roughly the 55 to 65 percent range, lower than Part 1 (Individuals) and Part 3 (Representation). Treat it as the part that needs the most preparation.

How many hours should I study for EA Part 2?

Most candidates need about 80 to 120 hours. If you work with business returns, partnerships, or S corporations day to day, you may land at the lower end. If business tax is new to you, plan for the higher end and spread it over 8 to 12 weeks.

What topics are on EA Part 2?

The exam covers business entities and their returns (sole proprietorships, partnerships, corporations, S corporations), business financial information (accounting methods, income, expenses, assets, depreciation), and specialized returns for trusts, estates, exempt organizations, and retirement plans.

What is the format of EA Part 2?

It is a computer-based exam with 100 multiple-choice questions delivered in a 3.5-hour testing appointment. Only 85 questions are scored; 15 are experimental and unscored. Scores are reported on a scaled basis with 105 as the passing mark.

Is EA Part 2 harder than Part 1?

Most candidates say yes. Business entity taxation, basis rules, depreciation, and the specialized returns section carry a lot of detail. If you come from an individual-tax background, budget extra time for partnership and corporate mechanics.