TD 10045, REG-108706-25, April 17, 2026

The Internal Revenue Service (IRS) and the Department of the Treasury recently issued interim final regulations (TD 10045) and a concurrent notice of proposed rulemaking (REG-108706-25) amending 26 CFR Part 300. These regulatory updates relate specifically to the imposition and reduction of user fees associated with the Special Enrollment Examination for Enrolled Agents (EA SEE). For tax professionals monitoring procedural costs and credentialing requirements under Treasury Department Circular No. 230 (31 CFR, Subtitle A, part 10), these amendments reflect favorable downward adjustments to the cost of admission to practice before the IRS.

Statutory Authority and Background

Pursuant to 31 U.S.C. § 330, the Secretary of the Treasury is authorized to regulate the practice of representatives before the Treasury Department, which includes the administration of a written examination to ensure applicants possess the requisite competency in tax matters. Furthermore, the Independent Offices Appropriation Act of 1952 (IOAA), codified at 31 U.S.C. § 9701, empowers federal agencies to prescribe user fees for services conferring special benefits to identifiable recipients.

Under Office of Management and Budget (OMB) Circular A-25, federal agencies are required to review these user fees biennially to ensure they accurately recover the full direct and indirect costs of providing the service. During the 2025 biennial review, the IRS calculated its costs for overseeing the EA SEE and determined that the cost per examination part had materially decreased.

Significant Changes to the User Fee

The most significant change promulgated by these regulations is the 33% reduction in the government portion of the EA SEE user fee. Under the amended 26 CFR § 300.4(b), the user fee per part is reduced from $99 to $66.

The regulatory text explicitly outlines this adjustment, stating: "The fee for taking the enrolled agent special enrollment examination is $66 per part, which is the cost to the government for overseeing the development and administration of the examination and is in addition to the fees charged by the administrator of the examination."

It is critical for practitioners to note that this $66 fee strictly covers the IRS's direct and indirect oversight costs, such as reviewing exam materials, conducting surveys of existing enrolled agents, and enforcing compliance with security protocols. This government fee does not cover the administration costs levied by the third-party contractor. For the testing period spanning May 2026 to February 2027, examinees will still be subject to a separate contractor fee of $251 per part.

Reasons for the Regulatory Changes

The IRS follows Generally Accepted Accounting Principles (GAAP) and standards set by the Federal Accounting Standards Advisory Board (FASAB)—specifically Statement of Federal Financial Accounting Standards (SFFAS) No. 4—to measure the full cost of federal programs. Using projections for fiscal years 2026 through 2028, the IRS determined that total labor, benefits, overhead, and related expenses amounted to $5,759,058 for an estimated 86,694 examination parts, yielding a cost of roughly $66.43 per application.

The interim final rule clearly states the operational drivers behind this reduction: "The decrease in the user fee is primarily attributable to a change in timekeeping methodology, which resulted in a smaller estimated expense for administering the EA SEE program. Additionally, there has been an increase in the number of exam takers, further distributing the fixed costs related to administering the exam."

Because the IRS "does not intend to subsidize any of the cost of making the EA SEE available to examinees and is not applying for an exception to the full-cost requirement in OMB Circular A-25," the fee was strictly calibrated to match this newly calculated lower cost.

Effective Dates and Applicability of the Regulations

The Treasury Department and the IRS issued these rules as interim final regulations to allow the fee reduction to take effect immediately for the upcoming exam cycle. The interim final regulations are effective on the date of their publication in the Federal Register (designated for publication on April 20, 2026).

Under 26 CFR § 300.4(d), the applicability date is defined as follows: "This section applies to registrations for the enrolled agent special enrollment examination that occur on or after [INSERT DATE OF PUBLICATION IN THE FEDERAL REGISTER]." The regulations are scheduled to be published on April 20, 2026.

To achieve this immediate relief for taxpayers, the IRS invoked the "good cause" exception under the Administrative Procedure Act (5 U.S.C. § 553(b) and (d)), which allows agencies to bypass standard notice and public comment periods prior to implementation. The IRS justified this procedural acceleration by noting: "It would be unnecessary and contrary to the public interest for the IRS to continue to charge the current, higher user fee pending public comment after the IRS has determined pursuant to the biennial review conducted under OMB Circular A-25 that the EA SEE user fee should be reduced going forward."

Regarding the proposed regulations (REG-108706-25), the text of the interim final regulations serves as the exact text for the proposed rules. The proposed effective date of the final regulations will mirror the interim applicability date, applying to EA SEE registrations occurring on or after the Federal Register publication date of the interim rule. However, the IRS will still accept electronic or written comments on the proposed rule for a period of 30 days following publication before officially finalizing the regulations.

Prepared with assistance from NotebookLM.