Title: To amend the Internal Revenue Code of 1986 to provide for a small partnership exception from certain requirements.
Policy area: Taxation

Summary:
This bill amends the Internal Revenue Code to exempt small partnerships from certain requirements relating to tax returns. The exception applies to any partnership having 10 or fewer partners, each of whom is an individual (other than a nonresident alien), a C corporation, or an estate of a deceased partner. For the purpose of the exception, a husband and wife (and their estates) must be treated as one partner.
The bill allows a partnership to elect to have deficiency procedures apply to the assessment or collection of any underpayment of tax attributable to certain adjustments involving a change in a partner's distributive share of the amount of any partnership item shown on the partnership return.

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3508 Introduced in House (IH)]

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115th CONGRESS
  1st Session
                                H. R. 3508

   To amend the Internal Revenue Code of 1986 to provide for a small 
            partnership exception from certain requirements.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             July 27, 2017

  Mr. Renacci (for himself and Mr. Davidson) introduced the following 
      bill; which was referred to the Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
   To amend the Internal Revenue Code of 1986 to provide for a small 
            partnership exception from certain requirements.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SMALL PARTNERSHIP EXCEPTION.

    (a) In General.--Paragraph (1) of section 6241 of the Internal 
Revenue Code of 1986, as in effect for returns filed for partnership 
taxable years beginning after December 31, 2017, is amended to read as 
follows:
            ``(1) Partnership.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the term `partnership' means any 
                partnership required to file a return under section 
                6031(a).
                    ``(B) Exception for small partnerships.--
                            ``(i) In general.--The term `partnership' 
                        shall not include any partnership having 10 or 
                        fewer partners each of whom is an individual 
                        (other than a nonresident alien), a C 
                        corporation, or an estate of a deceased 
                        partner. For purposes of the preceding 
                        sentence, a husband and wife (and their 
                        estates) shall be treated as 1 partner.
                            ``(ii) Election to have subchapter apply.--
                        A partnership (within the meaning of 
                        subparagraph (A)) may for any taxable year 
                        elect to have clause (i) not apply. Such 
                        election shall apply for such taxable year and 
                        all subsequent taxable years unless revoked 
                        with the consent of the Secretary.''.
    (b) Effective Date.--The amendment made by this section shall apply 
with respect to returns filed for partnership taxable years beginning 
after December 31, 2017.
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