§ 6037.
(c)
Shareholder’s return must be consistent with corporate return or Secretary notified of inconsistency
(2)
Notification of inconsistent treatment
(A)
In general
In the case of any subchapter S item, if—
(i)
(I)
the corporation has filed a return but the shareholder’s treatment on his return is (or may be) inconsistent with the treatment of the item on the corporate return, or
(II)
the corporation has not filed a return, and
(ii)
the shareholder files with the Secretary a statement identifying the inconsistency,
paragraph (1) shall not apply to such item.
(B)
Shareholder receiving incorrect information
A shareholder shall be treated as having complied with clause (ii) of subparagraph (A) with respect to a subchapter S item if the shareholder—
(i)
demonstrates to the satisfaction of the Secretary that the treatment of the subchapter S item on the shareholder’s return is consistent with the treatment of the item on the schedule furnished to the shareholder by the corporation, and
(ii)
elects to have this paragraph apply with respect to that item.
(3)
Effect of failure to notify
In any case—
(A)
described in subparagraph (A)(i)(I) of paragraph (2), and
(B)
in which the shareholder does not comply with subparagraph (A)(ii) of paragraph (2),
any adjustment required to make the treatment of the items by such shareholder consistent with the treatment of the items on the corporate return shall be treated as arising out of mathematical or clerical errors and assessed according to section 6213(b)(1). Paragraph (2) of section 6213(b) shall not apply to any assessment referred to in the preceding sentence.
(5)
Addition to tax for failure to comply with section
(Added [Pub. L. 85–866, title I, § 64(c)], Sept. 2, 1958, [72 Stat. 1656]; amended [Pub. L. 94–455, title XIX, § 1906(a)(3)], (b)(13)(A), Oct. 4, 1976, [90 Stat. 1824], 1834; [Pub. L. 97–354, § 5(a)(39)(A)], Oct. 19, 1982, [96 Stat. 1696]; [Pub. L. 98–369, div. A, title VII, § 714(q)(2)], July 18, 1984, [98 Stat. 965]; [Pub. L. 104–188, title I, § 1307(c)(2)], Aug. 20, 1996, [110 Stat. 1781].)