Exception:

The certification country is Bangladesh, Bulgaria, Cyprus, Hungary, Iceland, India, Kazakhstan, Malta, New Zealand, Russia, South Africa, Sri Lanka, or Ukraine, and the foreign tax home country is one of the above-named countries, but not the same country.

If none of the shareholders filed, there are more than 100 shareholders, or any one of the shareholders filed their individual tax returns as a non-resident:

Reject the 1120S certification application; issue Letter 3442.

Attach to the copy of the application a current transcript (TXMODA, or BMFOLT) for the tax year and TIN of all modules involved. Be sure to notate that the attached 1120S filer is in violation of their 2553 election.

Forward the case to Examination for Classification.

Any S corporation that has had its application declined, but believes it is entitled to U.S. Residency Certification, must submit a copy of the completed Form 8802, attach a detailed explanation and/or regulation or code section, including documentary evidence, as to why it believes it is entitled to certification.

Place the case in status 702.

Forward all applications and attachments to Planning and Analysis.

Any S corporation that has had its application declined or certification rejected, but believes it is entitled to treaty benefits under a specific treaty article, must follow Rev. Proc. 2015-40 to request Competent Authority help.