The Tax Court exam.

• Author: Starkman, Jay

Originally, attorneys and certified public accountants were admitted to practice before the Board of Tax Appeals, the U.S Tax Court's predecessor. Since 1942, when the Board was renamed the Tax Court of the United States, automatic admission has been limited to attorneys; CPAs and others are required to pass an exam before being allowed to represent clients before the court. As a result, very few CPAs overcome the onerous and difficult requirements the Tax Court has placed in their path. But the rewards to those few who succeed, and even to those who make a serious attempt but fail, make the effort worthwhile.

CPAs seeking a tax specialty designation, or those who just want to broaden their ability to deal with the IRS, should consider taking the Tax Court exam for non-attorneys. Anyone who passes the exam can practice in Tax Court on an equal footing with attorneys.

The exam is taken as much for the challenge as for the chance to pass. In the process of preparing for and taking the exam, "Tax Court enthusiasts" gain important knowledge of the tax litigation process.

Registering for the Exam

The exam is given biannually at the Tax Court building in Washington, D.C., in even-numbered years; the next exam is Nov. 7, 1996. The exam fee is $25.

The exam is scheduled for four hours, from noon to 4 p.m. (For CPAs from many parts of the country, it is possible to fly into Washington, take the test and be home again the same day.) At the exam, each applicant is provided with a copy of the Internal Revenue Code (the Commerce Clearing House (CCH) version was provided at the 1994 exam) and a copy of the Tax Court Rules of Practice and Procedure. Applicants are given five booklets, each with 16 pages, in which to write answers. Scratch paper, pens and pencils are also supplied. Calculators are allowed, but are of limited use.

Results are released in March. In prior years, the Tax Court curved the scores so that a little over 10% of applicants normally passed. However, beginning with the 1996 exam, any applicant who obtains a grade of 70% in each of the subjects covered will pass. In 1992, 76 applicants took the exam and only eight passed; in 1994, 127 took the exam with only 13 achieving a passing score. On request, the Admissions Office will send you a copy of your exam, a complete copy of your answers, and your grading sheet (at a cost of 50 cents per page). You can see which answers received full, partial or no credit. No official or unofficial answers are published. In addition, there is an appeals process for those applicants who did not pass.

Despite the low pass rate, Tax Court rules allow an applicant to take the exam just three times. After failing three times, an applicant is barred from taking the exam again. The legal basis for limiting the number of times the exam may be taken has not been challenged. However, an applicant who twice failed the exam unsuccessfully sued to compel admission. His case was...