SECTION 4. AUTOMATIC

PROCEDURE

.01 A bank, to which this revenue procedure applies, that elects under § 1362 to become an S corporation by filing a Form 2553 (Election by a Small Business Corporation) effective for its 1997 tax year will be deemed to have elected to change its method of accounting for bad debts from the § 585 reserve method to the § 166 specific charge-off method effective for its 1997 tax year (year of change) and to have agreed to all the terms and conditions of this revenue procedure.

.02 The bank must file a Form 2553 within the first 2 months and 15 days of the first day of its 1997 tax year for the S corporation election to be effective for its 1997 tax year.

.03 In accordance with § 1.446– 1(e)(3)(ii), the requirement to file an application on Form 3115 within the 180-day period provided in § 1.446– 1(e)(3)(i) is waived for any application for change in method of accounting filed pursuant to this revenue procedure. In addition, under § 1.446–1(e)(2)(i), the consent of the Commissioner is hereby granted to any bank within the scope of this revenue procedure to change its method of accounting for bad debts, in accordance with this revenue procedure, from the § 585 reserve method to the § 166 specific charge-off method for the bank’s 1997 tax year.

.04 A bank that uses this revenue procedure to change its method of ac

counting for bad debts from the § 585 reserve method to the § 166 specific charge-off method may not later use Rev. Proc. 85–8, 1985–1 C.B. 495, to return to the § 585 reserve method.

.05 A bank changing its method of accounting under this revenue procedure also must file a Form 3115 in duplicate. The original Form 3115 must be attached to the bank’s timely filed (including extensions) S corporation federal income tax return for its 1997 tax year. In addition, a copy of the Form 3115 must be filed with the national office addressed to the Commissioner of Internal Revenue, Attention: Office of Assistant Chief Counsel (Financial Institutions and Products) CC:DOM:FI&P, P.O. Box 7604, Benjamin Franklin Station, Washington, D.C. 20044, no later than the date the original Form 3115 is filed with the 1997 S corporation federal income tax return. No user fee is required for a Form 3115 filed under this revenue procedure. A Form 3115 filed pursuant to this revenue procedure will not be acknowledged.

.06 In addition to the filing requirements in section 4.05 of this revenue procedure, a bank that is under examination at any time between February 19, 1997, and the due date for filing its original federal income tax return (including extensions) for its 1997 tax year must provide a copy of the Form 3115 to the examining agent no later than the earlier of (i) 180 days after February 19, 1997, or for a bank that is not under examination on February 19, 1997, 180 days after the bank first comes under examination, or (ii) the date the bank must file its original federal income tax return (including extensions) for its 1997 tax year.