SECTION 4. RELIEF FOR LATE S

CORPORATION ELECTIONS UNDER THIS REVENUE PROCEDURE

.01 Eligibility for Relief. A corporation is eligible for relief if it meets the following requirements:

(1) The corporation fails to qualify as an S corporation solely because the Form 2553 (Election by a Small Business Corporation) was not filed timely pursuant to § 1362(b)(1); and

(2) The due date for the tax return (excluding extensions) for the first year the corporation intended to be an S corporation has not passed.

.02 Procedural Requirements for Re- lief. Within 6 months of the original due date for the S corporation election, the corporation must file with the applicable service center a completed Form 2553, signed by an officer of the corporation authorized to sign and all persons who were shareholders (or deemed to have been shareholders) at any time during the period that began on the first day of the taxable year for which the election is to be effective and ends on the day the election is made. The Form 2553 must state at the top of the document “FILED PURSUANT TO REV. PROC. 97–40.” Attached to the Form 2553 must be a statement explaining the reason for the failure to file a timely S corporation election.

.03 Relief for Late S Corporation Elec- tions. Upon receipt of a completed application requesting relief under this revenue procedure, the Internal Revenue Service will determine if there was reasonable cause for the failure to file a timely S corporation election and will notify the corporation of the result of the reasonable cause determination.