About the Tax Compliance & Planning (TCP)
CPA Exam

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The Tax Compliance & Planning (TCP) discipline of the CPA Exam is designed to evaluate candidates’ knowledge of individual and entity tax compliance, personal financial planning, and entity planning. It’s one of three discipline options candidates can choose from based on the exam’s core-plus-discipline model effective January 2024. According to the AICPA blueprints, here are some specific topics covered on the TCP CPA Exam:

TCP CPA Exam Blueprint TCP CPA Exam Blueprint

Candidates who choose this discipline are likely to consider roles as financial advisors, tax consultants, and wealth managers, among others. If this speciality interests you, read on to learn what to expect from the TCP CPA Exam.

How the TCP Discipline Is Related to the REG Core

The TCP CPA Exam is an extension of the REG CPA Exam, which is a core CPA Exam section that all candidates must take. The objective of the CPA Evolution is to ensure that the three core sections examine applicants' foundational knowledge, while the discipline sections examine applicants’ knowledge of advanced concepts within each domain. Thus, the REG core will test your general understanding of taxation and regulations, while the TCP discipline will test tax situations at a more granular level.

The TCP CPA Exam’s Structure and Format

The TCP discipline features five testlets in total. Testlets 1 and 2 consist of 34 multiple-choice questions (MCQs) each, totaling 68 MCQs for the full exam. Testlets 3, 4, and 5 consist of 2 to 3 task-based simulations (TBSs), of which there are 7 for the full exam. The MCQ section accounts for 50% of your score, while the TBS section accounts for the remaining 50%.

Question Type Number of Questions Score Weighting
MCQs 68 50%
TBSs 7 50%

TCP is a computer-based, 4-hour-long exam. Since you have limited time, you must allocate it wisely for each question. We suggest allocating approximately 1.3 minutes for each MCQ, which results in roughly 45 minutes per testlet. For the TBS testlets, we suggest allocating about 20 minutes for each TBS. That way, all TBSs will be completed within 140 minutes. This leaves you with 10 extra minutes to recheck answers, or simply gives you a cushion in case you fall behind on a testlet.

Testlet Question Type Suggested Time
Testlet 1 34 MCQ 45 Minutes
Testlet 2 34 MCQ 45 Minutes
Testlet 3 2 TBS 40 Minutes
15 minute break (does not count toward total exam time)
Testlet 4 3 TBS 60 Minutes
Testlet 5 2 TBS 40 Minutes
Extra Time 10 minutes
Total Time 240 minutes
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TCP Exam Blueprint: Content Areas & Allocation

As laid out in the AICPA blueprints, the TCP Exam includes four content areas that cover advanced concepts pertaining to tax compliance and planning. You can learn about each subject area and topic weight in the table below:

Area I of the TCP blueprint addresses federal tax compliance for nonroutine transactions and issues, tax planning, and personal financial planning. The content area consists of the following:

  • Individual compliance and tax planning considerations for gross income, adjusted gross income, taxable income, and estimated taxes
  • Compliance for passive activity and at-risk loss limitations (excluding tax credit implications)
  • Gift taxation compliance and planning
  • Personal financial planning for individuals

Area II of the TCP blueprint addresses federal tax compliance pertaining to non-routine entity tax transactions and concerns. The content area consists of the following:

  • C corporations
  • S corporations
  • Partnerships
  • Trusts
  • Tax-exempt organizations

Area III of the TCP blueprint addresses federal tax planning for organizations. The content area consists of the following:

  • Formation and liquidation of business entities
  • Tax planning for C corporations
  • Tax planning for S corporations
  • Tax planning for partnerships

Area IV of the TCP blueprint addresses federal tax compliance concerns associated with asset dispositions. The content area consists of the following:

  • Nontaxable disposition of assets
  • Amount and character of gains and losses on asset disposition and netting process
  • Related party transactions, including imputed interest

Download the latest AICPA CPA Exam Blueprint

TCP Section Assumptions

When sitting for the TCP section of the exam, candidates should base their answers on the information provided within the question. You will not be tested on specific tax rate percentages, amounts, or limitations indexed to inflation. Regarding questions that could have different tax treatments based on timing (e.g., net operating losses), you will be provided with all necessary information (e.g., actual dates in order to reference specific portions of the IRC or Treasury Regulations). In the absence of timing indications or other stated assumptions, you should assume that transactions or events referenced in questions occurred in the current year, and apply the most recent provisions of tax law in accordance with the timing outlined in the CPA Exam Policy on New Pronouncements.

Skills Tested on the TCP Exam

The TCP CPA Exam follows Bloom's Taxonomy of Educational Objectives as a skill-set parameter. The table below depicts necessary skills to pass the TCP Exam:

TCP CPA Exam Skill Levels Table - Remembering and Understanding, Application, Analysis, Evaluation TCP CPA Exam Skill Levels Table - Remembering and Understanding, Application, Analysis, Evaluation

The TCP section of the CPA Exam evaluates information at the first three skill levels of Bloom's Taxonomy:

  • Remembering and Understanding (5-15%): Mainly concentrated in Areas I and II, containing nonroutine compliance issues encountered by newly-licensed CPAs.
  • Application (55-65%) and Analysis (25-35%) : Examined across all Areas, containing day-to-day planning tasks that newly-licensed CPAs must perform related to tax, personal financial planning, and the preparation and review of tax returns.

Accounting Roles Related to Tax Compliance & Planning

Aspiring CPAs have many career-path options, but candidates who choose to take the TCP discipline will be uniquely positioned to excel in the following accounting careers:

5 accounting roles related to the TCP discipline

1. Financial Advisor

As a financial advisor, CPAs may advise on estate planning, retirement planning, risk management, and investing, among other topics. Some CPAs may offer various services, while others may opt to specialize in a certain field, such as tax planning. The majority of these skills are tested in TCP Area I.

2. Tax Consultant

A tax consultant researches tax matters, suggests solutions to minimize and address tax liability, prepares and submits tax returns, and represents clients before the IRS during audits. To advise clients on tax-planning measures, tax advisors must keep abreast of tax law changes. These skills are at the heart of what TCP covers; when you pass TCP, you will have the skills and knowledge to successfully consult across a wide variety of tax matters.

3. Tax Preparer

A tax preparer prepares tax returns for everything from individuals, businesses, and organizations to complex enterprises, trusts, and nonprofits. Individual taxes are tested in TCP Area I, while entity taxes are tested in Areas II and III.

4. Tax Auditor

A tax auditor is a trained professional who looks over financial records to see if they follow tax rules. All tax auditors employ accounting principles in the course of their duties. They endeavor to ensure compliance with federal, state, and local tax laws by firms, people, agencies, and organizations. Similar to a tax consultant, a tax auditor must possess a wide-ranging skill set of tax knowledge. Most of the skills necessary for a tax auditor are tested in TCP Areas II, III, and IV.

5. Wealth Manager

Wealth managers take care of their clients’ money and plan their finances. This often includes helping clients plan their lifestyle by making a budget, planning cash flow, and saving money for college and retirement. Similar to a financial advisor, the majority of the skills relevant for a wealth manager are tested in TCP Area I.

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The Tax Compliance & Planning (TCP) discipline of the CPA Exam covers topics related to individual and entity tax compliance, personal financial planning, and entity planning.
The TCP discipline is an extension of the REG Core Section. However, its relative difficulty will depend on your comfort level with the covered topics and how well you prepare. Because TCP builds on REG, we suggest preparing for it after you have completed REG.
The TCP CPA Exam is a 4-hour exam consisting of 5 testlets, covering 68 multiple-choice questions and 7 task-based simulations. After the first 3 testlets, candidates are given a 15-minute break that does not count toward the total exam time.
The highest-performing CPA candidates usually prepare with a CPA Exam review course to practice TCP questions in advance and get acclimated to the TCP exam’s testing interface. Your course should include top-rated CPA Exam practice questions that leverage a learn by doing approach. This tactic has been shown to improve student learning outcomes.
As you begin the TCP study process, you first need to set up a CPA Exam study plan that you can stick with—meaning it fits into your life. A successful study plan maps out every day you will be studying, the content you will cover on those days, and the tasks you will perform—such as reviewing lectures, taking practice tests, etc. It’s important that you prepare with a top-quality CPA review course to ensure you have sufficient coverage of the content and access to practice questions that mirror the actual CPA Exam. As you work through the material, pay attention to your performance metrics. They will help you determine your strengths and weaknesses so that you can focus your study efforts where they matter most.

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