SECTION 4. NO RULE AREAS

TO TAKE INTO ACCOUNT THIS REVENUE PROCEDURE

.01 Areas in Which PLRs Will Not Be Issued .

(1) Principal purpose determinations regarding the one class of stock require- ment . The IRS will not issue a PLR under § 1362(f) addressing the validity or continuation of an S election in situations regarding the one class of stock requirement that require a determination of the existence of a principal purpose because such a determination is inherently factual in nature. See section 6.02 of Rev. Proc. 2022-1 (or any successor revenue procedure). Accordingly, the IRS will not issue a PLR under § 1362(f) addressing:

(a) For purposes of determining whether all outstanding shares of stock confer identical rights to distribution and liquidation proceeds under § 1.1361-1(l) (2), whether a principal purpose of a commercial contractual agreement, buy-sell agreement, an agreement restricting the transferability of stock, or a redemption agreement is to circumvent the one class of stock requirement of § 1361(b)(1)(D) and § 1.1361-1(l) ( see § 1.1361-1(l)(2)(i) and (iii)(A)( 1 )); or

(b) For purposes of determining whether an instrument, obligation, or

arrangement is treated as a second class of stock, whether:

(i) A principal purpose of issuing or entering into an instrument, obligation, or arrangement is to circumvent the rights to distribution or liquidation proceeds conferred by the outstanding shares of stock or to circumvent the limitation on eligible shareholders contained in § 1.1361-1(b) (1) ( see § 1.1361-1(l)(4)(ii)(A)( 2 )); or

(ii) A principal purpose of an unwritten advance or proportionately held obligation is to circumvent the rights of the outstanding shares of stock or the limitation on eligible shareholders under § 1.1361‑1(l)(4)(ii)(A)( 2 ) ( see § 1.13611(l)(4)(ii)(B)). (2) Comfort rulings . The IRS will not issue a PLR under § 1362(f) addressing the validity or continuation of an S election or a QSub election in situations addressed by the relief procedures provided in sections 3.01 through 3.05 of this revenue procedure because such a PLR would comprise a “Comfort Ruling” (as defined by section 6.11 of Rev. Proc. 2022-1 and section 4.02(9) of Rev. Proc. 2022-3). Accordingly, the IRS will not issue a PLR under § 1362(f) addressing:

(a) Disproportionate distributions . Determinations of the validity or continuation of an S election with regard to one or more disproportionate distributions (as defined in section 2.03(2) of this revenue procedure) if the governing provisions confer identical rights to distribution and liquidation proceeds. See § 1.1361-1(l)(1) and (2).

(b) Missing administrative S election acceptance letter or QSub election accep- tance letter . Whether a missing administrative letter from the IRS accepting an election for a corporation to be an S corporation or accepting an election for a corporation to be a QSub affects the validity or continuation of the election.

(c) Filing of Federal income tax return inconsistent with status as an S corpo- ration or QSub . Whether the filing of a Federal income tax return that is inconsistent with a corporation’s status as an S corporation or a QSub affects the validity or continuation of the S election or QSub election (as appropriate).

.02 Areas in Which a PLR Will Not Ordinarily Be Issued . Rev. Proc. 2022-3 is amplified and modified by—

Bulletin No. 2022–41 289 October 11, 2022

(1) Revising section 4.01(47) to read as follows:

(47) Section 1362.—Election; Revocation; Invalidation; Termination.—All situations in which the Service has provided an automatic approval procedure or administrative procedure for an S corporation or its shareholders to obtain the following:

(i) Relief for late S corporation elections, qualified subchapter S subsidiary elections, qualified subchapter S trust elections, or electing small business trust elections. See Rev. Proc. 2013-30. (For instructions on how to seek this relief, see Rev. Proc. 2013-30.)

(ii) Retroactive corrective relief regarding non-identical governing provisions for S corporations meeting the eligibility requirements of Rev. Proc. 2022-19, section 3.06(2)(b). (For instructions on how to seek this relief, see Rev. Proc. 2022-19, section 3.06).

(2) Adding the following as the last paragraph of section 4.01:

Section 1362(f).—Certain inadvertent errors, omissions, or missing signatures.—Except with regard to an inadvertent error relating to a “permitted year” (as defined in § 1378(b) and § 1.1378‑1), the absence of a required shareholder consent, or an officer signature for which there is no other relief as provided in Rev. Proc. 2022-19, section 3.03, the IRS will not issue a PLR under § 1362(f) addressing whether an inadvertent error or omission, or a missing required consent or signature ( see § 1362(a)(2), § 1.1361-3(a)(2), and § 1.1362-6(a)(1)), on Form 2553 or Form 8869 affects the validity of the S election or QSub election.