Under IRC § 1445, the buyer in a FIRPTA transaction is personally liable for withholding 15% of the gross sales price and remitting it to the IRS within 20 days of closing. Not the seller. Not the title company. You. We handle the entire withholding-agent role on your behalf — Forms 8288 and 8288-A, EFTPS payment, IRS verification — so the closing proceeds without your personal exposure.
FIRPTA was drafted to make sure the IRS gets paid even when the seller leaves the country. The mechanism: shift the collection burden onto the buyer. As the buyer, federal law treats you as the statutory Withholding Agent — and assigns liability accordingly.
If 15% of the gross sale price is not withheld at closing and remitted within 20 days, the IRS can come after you personally for the tax, plus penalties and interest. This is true even if:
The penalties can be steep: up to 100% of the under-withheld amount, plus interest from the closing date. On a typical $1M transaction with 15% statutory withholding, that's $150,000 of personal exposure — penalties that compound monthly until satisfied.
The good news: done correctly, the entire process is administrative. The withholding goes to the IRS, the seller eventually files their return and recovers any excess, and you walk away clean. We make sure "done correctly" is what actually happens.
We verify whether the 15% statutory rate applies, or whether a reduced rate (10% for residence buyers, $300k–$1M) or exemption applies based on your specific transaction. Documented in writing before closing.
Under the January 2026 revision (one form per disposition, per seller), we prepare the complete IRS package — withholding return, seller statement(s), and payment instructions — ready for filing before the 20-day deadline.
The IRS has mandated electronic FIRPTA payments via EFTPS. We guide buyer enrollment (allow 7–10 business days for the PIN), then execute the payment with the precise IRS withholding-agent codes.
Within 48 hours of the 20-day deadline, we confirm IRS receipt of payment and forms, obtain the EFT trace number, and deliver clean documentation for your records — closing the personal-liability window.
To correctly fulfill your withholding-agent obligation, you need specific documentation from the seller. Missing items create the personal-liability exposure — so we help you collect them systematically before closing.
The IRS has mandated that FIRPTA withholding payments must be made electronically through the Electronic Federal Tax Payment System (EFTPS). This is a meaningful change from the historical paper-check process — and a frequent source of last-minute scrambling at closing.
What buyers need to know:
The mandate's effective date has been postponed. Paper checks may still be accepted in the interim, but the date for full electronic-only enforcement has not been finalized. We monitor IRS guidance and recommend EFTPS enrollment regardless — once enforcement begins, paper checks will be rejected outright. Read our full EFTPS guide →
Anchored to your closing date, here's what the buyer-side process looks like when we're engaged early.
You receive notice (often from the title company or seller's counsel) that the seller is a foreign person under § 1445. You contact us. We confirm the withholding rate and begin EFTPS enrollment if not already in place.
Forms 8288 and 8288-A drafted with seller TIN, transaction details, and exact withholding amount. Reviewed with you and the closing agent. Filed copies provided to title for closing-day reference.
Closing executes. Withholding amount routes to your EFTPS-ready account (or escrow if a Form 8288-B was filed pre-closing). Title company forwards seller proceeds net of withholding.
We execute the EFTPS payment well inside the 20-day deadline. Forms 8288 and 8288-A delivered to IRS Ogden. EFT acknowledgement received and recorded.
Within 48 hours of the deadline, we confirm IRS receipt of forms and payment. Stamped 8288-A delivered to the foreign seller. You receive complete documentation for your records.
With clean documentation showing timely filing and full remittance, your withholding-agent obligation is fully satisfied. The IRS cannot come after you personally for under-withholding.
Not every transaction with a foreign-sounding seller triggers FIRPTA withholding. Several exemptions exist — but each has strict documentation requirements. Before relying on any of them, we confirm eligibility in writing and prepare the supporting documents your file needs.
Worth noting: Section 899 (enacted in the One Big Beautiful Bill Act) can add a surcharge of 5 to 20 percentage points on top of the standard FIRPTA rate for sellers from certain countries. State-level nonresident withholding (CA, HI, CO, NJ, GA, others) may stack independently. Read about Section 899 →
FIRPTA's withholding-agent rules are unforgiving on form, timing, and payment channel. We handle every piece — so your closing proceeds and your name leaves the IRS's withholding-agent ledger clean.