SECTION 4. RELIEF FOR LATE

S CORPORATION ELECTION UNDER THIS REVENUE PROCEDURE

.01 Eligibility for Relief . An entity may request relief under this revenue procedure if the following requirements are met:

(1) The entity fails to qualify for its intended status as an S corporation on the first day that status was desired solely because of the failure to file a timely Form 2553 with the applicable campus; (2) The entity has reasonable cause for its failure to file a timely Form 2553;

(3) The entity seeking to make the S corporation election has not filed a tax return for the first taxable year in which the election was intended;

(4) The application for relief is filed under this revenue procedure no later than 6 months after the due date of the tax return (excluding extensions) of the entity seeking to make the election for the first taxable year in which the election was intended; and

(5) No taxpayer whose tax liability or tax return would be affected by the S corporation election (including all shareholders of the S corporation) has reported inconsistently with the S corporation election, on any affected return for the year the S corporation election was intended.

.02 Procedural Requirements for Relief . An entity may request relief for a late S corporation election by filing with the applicable campus a properly completed Form 2553 ( see Form 2553 and Instructions) with a Form 1120S for the first taxable year the entity intended to be an S corporation. A properly completed Form 2553 includes a statement establishing reasonable cause for the failure to file the S corporation election timely. The Form 2553 will be modified to allow for the inclusion of such statement. The forms must be filed together no later than 6 months after the due date of the tax return (excluding extensions) of the

October 9, 2007 788 2007–41 I.R.B.

sification elections intended to be effective for taxable years that end on or after December 31, 2007.