Large Partnership Audits – Part 2: Update And Some Basics

In our first article in this series, we discussed the impending large partnership compliance (LPC) program operated by the IRS's Large Business & International Division (LB&I) and described the anticipated audit selection process, audit issues, and audit process.¹ As discussed in that article, the LPC program is designed to increase audit coverage of this important taxpayer pool and leverages the partnership audit changes effected through the Bipartisan Budget Act of 2015 (commonly known as the BBA). The BBA streamlines the IRS audit and collection process by (1) appointing liability for any proposed tax liability to the partnership in the first instance (absent a "pushout" election to the contrary) and (2) concentrating partnership decision-making power in one person, the partnership representative.