In October 2021, the Internal Revenue Service’s (IRS) Large Business and International (LB&I) division initiated the Large Partnership Compliance (LPC) program, an effort geared towards enhancing audit procedures for large partnerships. The move by the IRS has significant implications for large corporations and law firms, and further underscores the changing landscape of legal compliance in the United States.
Akin to the established protocol observed by the Large Corporate Compliance (LCC) program, the LPC’s audit selection process is a two-step general procedure. The first step involves an automated review of certain key thresholds within large partnership returns. This course of action echoes the LCC’s conservative yet effective approach to audit selection.
Adoption of these salient features from the LCC program suggests a concerted attempt by the LB&I to bolster its audit capabilities. As the IRS continues to enhance its audit procedures, large corporations and law firms will need to keep abreast of these changes in order to ensure continued legal compliance.
More details about these changes can be found here.