an IRIC may hold— (1) an amount of cash and cash equivalents reasonably necessary or appropriate for the corporation to conduct its normal affairs, and (2) such other assets as are incidental to the corporation’s conduct of its normal affairs or otherwise allowed by the Secretary. (d) Termination (1) In general Except as provided in paragraph (2), if a corporation fails to meet the requirements of subsection (a) at any time during the taxable year, the corporation shall not be treated as an IRIC for such taxable year. (2) Inadvertent failure (A) In general A corporation which fails to meet the requirements of subsection (a) for any taxable year shall nevertheless be considered to have satisfied the requirements of such subsection for such taxable year if— (i) the failure was due to reasonable cause and not due to willful neglect, (ii) no later than 30 days after the discovery of the event causing such failure, the corporation meets the requirements of subsection (a), (iii) in the case of a failure to meet the requirements of subsection (a)(3) for any period, the failure was caused by persons not described therein holding, in the aggregate, less than 1 percent of the stock (by value) of the corporation, and (iv) the corporation pays the additional tax imposed by reason of subparagraph (B). (B) Imposition of additional tax on certain failures In the case of a failure described in subparagraph (A)(iii) for any taxable year, the tax imposed by section 998A(a) on the IRIC shall be equal to the sum of— (i) the tax determined under such section (without regard to this subparagraph) on amounts received by the IRIC for the taxable year other than amounts so received which are attributable to stock held by persons not described in subsection (a)(3) for the period so held, plus (ii) 100 percent of the amounts received which are so attributable. The Secretary shall prescribe rules for the proper allocation of deductions to amounts described in this subparagraph. 998A. Taxation of IRICs (a) In general In the case of an IRIC,