SECTION 4. INAPPLICABILITY OF

PENALTIES

If a domestic partnership or S corporation satisfies the requirements of sec

tion 5 of this notice, penalties for failures described in sections 6698(a), 6699(a), 6722(a) or any similar provision will not apply to the domestic partnership or S corporation to the extent such failures arise from acting consistently with proposed §1.951A-5 prior to June 22, 2019 (such as, by issuing one or more Proposed Regulation Schedules K-1 and not reissuing Schedules K-1 based on the Final Regulations) including from filing a Form 1065 or Form 1120S based on the Final Regulations after June 21, 2019, that incorporates Schedules K-1 consistent with the Proposed Regulations that were issued before June 22, 2019.