Beginning with 2018 tax returns, new procedures will take effect for IRS audits of partnership tax returns. These procedures will apply to partnerships and limited liability companies taxed as partnerships unless those entities are eligible to opt out and elect to do so.

The tax reform legislation that was passed in December 2017 significantly reduced the top corporate tax rate that applies to C corporations from 35% to 21%. In addition, a new deduction was included in the 2017 Tax Reform for individual owners of many pass-through businesses, such as partnerships and S corporations.