Note:

When the prior year return has not been filed and isn’t yet required, the declaration must address the Applicant’s residency status in the prior year as well as in the current year.

If the requestor failed to provide the required information, suspend the case and contact the requestor for the missing information using the Letter 3441, or by telephone.

When the applicant responds with requested information, continue processing the application.

If the applicant was contacted by phone, allow 5 days for response. If no reply, issue Letter 3441.

If the applicant fails to provide the required information within 30 days (60 days overseas), close the certification case as a no reply.

Certification of a S corporation requires:

The filing of a Form 1120-S

Tax disclosure authorization for the requestor from each shareholder

Tax disclosure authorization from an officer with legal authority to bind the corporation

A shareholders list attached to the certification application in which each shareholder listed must have filed their required U.S. income tax return/extension as a resident of the U.S.

A penalties of perjury statement from each shareholder listed on the shareholders list attached to the certification, as well as a penalties of perjury statement from an officer with legal authority to bind the corporation.

In addition to using the procedures in this section for working S corp. status codes, use the chart below for a quick reference to working status codes 515, 520 and 522.

If

Then

1. Status Code 515

Check for input errors. Verify, using Form 8802, the type of certification application.

2. Application is for VAT, not Income Tax and the required return is filed

Check the VAT indicator and override 515; issue certification using the paragraph: SCO.1120S.VAT.

3. No input errors

Follow procedures for securing Shareholder List.

4. Status Code 520

Check for input errors. Verify Shareholder's Name and TIN using Shareholders list, correct, if needed.

5. If no input errors or corrections made, but one or more shareholder failed to file their tax return

Override 520, issue certification with list of shareholders that filed the required returns. Certification will be issued using one of the paragraphs in the SCO.1120S series.

6. Status Code 522

Check for input errors. Verify shareholder's Name and TIN using Shareholders list, correct, if needed.

7. No input errors and one or more shareholders file a Form 1040-NR

DO NOT ISSUE certification. Follow instruction in IRM 21.8.2, BMF International Adjustments, for notifying Examination of a possible violation of Form 2553 election.

Issue the standard 1120S certification, when the S corporation and all its shareholders have:

Filed their required returns

Provided tax disclosure authorization for the requestors

Provided penalties of perjury statements for current year applications