REG — Taxation and Regulation
How to pass REG when you work full time
By Joey Arnold, CPA
REG is two exams wearing one name. Roughly four-fifths of it is federal taxation. The rest is business law — agency, contracts, debtor-creditor, federal regulation — which has almost nothing in common with the tax material sitting next to it.
That split is the whole challenge. Candidates who love tax neglect the law. Candidates who came from an audit background do the reverse. Both leave points on the table in a section with a 66.87% pass rate (Q2 2026).
What REG tests
REG covers five areas, and the AICPA publishes how heavily each is weighted:
| Area | Weight | What’s in it |
|---|---|---|
| I. Ethics, Professional Responsibilities & Federal Tax Procedures | 10–20% | Circular 230, preparer rules and penalties, audits and appeals, substantiation, the authoritative hierarchy |
| II. Business Law | 15–25% | Agency, contract formation and performance, debtor-creditor relationships, federal laws and regulations, business structures |
| III. Federal Taxation of Property Transactions | 5–15% | Basis, cost recovery, sales and dispositions, nonrecognition transactions |
| IV. Federal Taxation of Individuals | 22–32% | Gross income, adjustments and deductions, loss limitations, filing status, credits |
| V. Federal Taxation of Entities | 23–33% | C corporations, S corporations, partnerships, LLCs, tax-exempt organizations |
Add Areas IV and V and you’re at 45–65% of the exam in entity and individual taxation alone. That’s where the weight is, and it’s where the studying should be.
Business law at 15–25% is the part people misjudge in both directions. A quarter of the exam is too much to wing, and it’s also finite and rule-based enough that you shouldn’t be spending half your hours there.
The format
- 4 hours, five testlets
- 72 multiple-choice questions across two testlets
- 8 task-based simulations across three testlets
- Optional 15-minute break after testlet 3, which doesn’t count against your time
The skill mix is 25–35% Remembering and Understanding, 35–45% Application, 25–35% Analysis.
That first number is worth noticing. REG gives recall 25–35% of its weight, against 5–15% on FAR — thresholds, phase-outs, deadlines and dollar limits are genuinely tested here, and there’s no clever way around learning them.
Why people fail REG
They treat business law as optional. It’s up to a quarter of the exam, and it’s clean, rule-based material — clear rules with clear answers. Skipping it to spend more time on tougher tax topics is a bad trade.
They memorize numbers without the structure. REG is full of thresholds, and candidates try to hold them as a list. The ones who pass learn the framework first — how income becomes AGI becomes taxable income — and hang the numbers on it. Isolated numbers fall out of your head in a week.
They study from stale material. Tax law moves. A threshold that was right two years ago may be wrong now, and on REG, out-of-date study material actively teaches you wrong answers.
How long REG takes around a full-time job
Most candidates need somewhere around 80–120 hours to get ready for REG — a real commitment around a full-time job, and more if tax is unfamiliar. If you already work in tax, you’ll trend toward the lower end; if you don’t, plan for the upper end.
Consistency matters more than intensity. Study a little every week and you spend your time learning new material. Study in bursts and you spend half of it relearning what you forgot.
How to study REG when your time is limited
Let the Blueprint set your priorities. The AICPA publishes exactly what it tests and how heavily. Areas IV and V carry the bulk of the weight — make sure your hours reflect that before you go deep anywhere else.
Give business law its own sessions. Don’t fold it into tax review. It’s a different kind of thinking, and mixing it in is how it ends up half-learned.
Learn the frameworks before the numbers. Get the shape of individual taxation and entity taxation clear first. Thresholds attach to a structure far more easily than they stick on their own.
Do questions earlier than feels comfortable. Get into MCQs while a topic still feels shaky. The discomfort is the point — retrieval under difficulty is what makes it stick.
Interleave. Once you’ve covered a few areas, mix them in review rather than doing one topic at a time. It feels worse but it works better — mixed practice is closer to what exam day actually is.
How Smarter CPA covers REG
REG rewards precision, so this is where clear teaching beats volume. We teach every area the Blueprint tests and cut the detail the examiners don’t ask about. Fewer hours, full coverage.
You get, for REG:
- Bite-sized lectures across all five chapters, built to watch in the gaps in your day
- A full written textbook plus cheat sheets for fast, high-yield review
- Exam-quality MCQs with explanations that teach the reasoning, not just the answer
- Task-based simulations with full written explanations
- Spaced-repetition flashcards, elaboration journals, and progress quizzes to make it stick
- Three full-length simulated exams that mirror exam-day timing and interface
- A day-by-day study plan — 30, 45, 60, 75 days, and more
- A Game Plan Call with Joey to set your date and build the plan around your real schedule
“I had no prior experience or knowledge about US tax laws — it was completely different from Indian income taxes. So, I had to start from scratch… Joey’s REG course really helped me, and it made my journey for TCP way smoother than I had initially thought.”
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REG FAQ
Is REG easier than FAR?
How much of REG is business law?
Do I need a tax background to pass REG?
Should I take REG early or late?
Can I buy just REG?
What if I’ve already failed REG?
Pass-rate figures are AICPA published results for Q2 2026 (the latest available); rates update quarterly. Source: AICPA CPA Exam pass rates. Last updated August 21, 2026.