This Internal Revenue Manual (IRM) contains processing instructions for use at the Ogden Submission Processing Center (OSPC). In addition, Austin Submission Processing Center (AUSPC) uses this IRM to credit verify Form 8288-A, Statement of Withholding on Dispositions by Foreign Persons of U.S. Real Property Interests.

The work is processed to the International Web Applications (INTL WebApps) Database. The INTL WebApps Database performs processing, storage and retrieval of Form 8288-A, Form 8288-BApplication for Withholding Certificate for Dispositions by Foreign Persons of U.S. Real Property Interests,Form 8233Exemption from Withholding on Compensation for Independent (& Certain Dependent) Personal Service of a Nonresident Alien Individual,Form 8805 Foreign Partners Information Statement of Section 1446 Withholding Tax, and Section 897(i) Elections.

The INTL WebApps Database (Foreign Investment Real Property Tax Act (FIRPTA), Project 1446, Form 8233 and 897(i) Elections) consists of an Oracle Database containing Oracle forms and reports, which houses international returns filed by foreign persons or entities that sell U.S. Real Property Interests (USRPI) in this country, invest in a domestic partnership in the United States, and claim Tax Treaty Benefits. The system performs processing, storage and retrieval of Forms 8288-A, 8288-B, 8233, 8805, and Section 897(i) Elections. The INTL WebApps Database also initiates correspondence to taxpayers who file Form 8288-A.

The following related resources are also used in processing Form 8805 and 8288-A documents:

All Business Master File (BMF) International returns received at IRS offices (Campuses, Field Offices, etc.) other than OSPC must be transshipped to OSPC, with the exception of Non-Master File (NMF) Form 1040-NR Estate or Trust, Form 8288 (Date of Transfer (DOT) prior to 12/13/05), and Form 8804 (tax period 200411 and Prior), which must be transshipped to Cincinnati Submission Processing Center (CSPC) for processing. However, you must first:

In general, a copy of Form 8288-A stamped by the IRS must be attached to the transferor's (sellers) return to establish the amount withheld under IRC § 1445(a) which is available as a credit. In situations where the tax has been withheld but the transferee (purchaser) does not pay over the amount withheld to the IRS, the transferor (seller) will not receive a stamped copy of Form 8288-A from the IRS. Nonetheless, the transferor (seller) can establish the amount of tax withheld by the transferee (purchaser) by attaching to its tax return substantial evidence (e.g., closing documents) of the amount of tax withheld.

The purpose of this initiative is to achieve consistency in the Business Master File (BMF) Code and Edit processing IRMs.

Topics for BMF Consistency have been identified and developed as a coordinated effort between Cincinnati, Ogden and Paper Processing Branch BMF Code and Edit/ERS.

BMF Consistency Subsections are identified by a ♦ (diamond) before and after the title.

Text in normal print is the common processes for BMF returns. The text in BOLD print is form specific and applies to this IRM only.

Refer taxpayers to the Taxpayer Advocate Service (TAS) (see IRM Part 13, Taxpayer Advocate Service) when the contact meets TAS criteria (see IRM 13.1.7, TAS Case Criteria) or has Form 911 attached and you can't resolve the taxpayer's issue the same day. The definition of "same day" is within 24 hours. "Same day" cases include cases you can completely resolve in 24 hours, as well as cases in which you have taken steps within 24 hours to begin resolving the taxpayer's issue. Do not refer these cases to TAS unless they meet TAS criteria and the taxpayer asks to be transferred to TAS. Refer to IRM 13.1.7.4, Same-Day Resolution by Operations. When referring cases to TAS, use Form 911, Request for Taxpayer Advocate Service Assistance (and Application for Taxpayer Assistance Order), and forward to TAS in accordance with your local procedures.

Tax return information can be received via fax as part of return perfection even if a taxpayer signature is required. In circumstances where contact with the taxpayer has been made and documented, fax signatures are acceptable.

Contact with the taxpayer may be by telephone or correspondence. Follow local procedures to determine which method of contact will be used.

Code and Edit examiners will indicate the fax paragraph on the approved Correspondence Action Sheet to advise taxpayers of the option to fax their response.

Background: The Restructuring and Reform Act of 1998, Section 3705 provides identification requirements for all IRS employees working tax related matters.

IRS employees are required to give their name and unique identification number during taxpayer telephone, face to face, and written contact.

Contact Procedures are contained in the following eight paragraphs.

All IRS employees, in the field, and national office, who communicate, by telephone, correspondence or face to face, with taxpayers, or their personal representatives, on tax-related matters are required to provide (at a minimum) the following information:

All correspondence must include a telephone number where the taxpayer’s question can be answered. In addition, manually generated and handwritten correspondence must include:

The IDRS number and numbers for some other letter systems are automatically generated. If it is not generated, or a handwritten note is prepared, the ID card (badge) number must be used.

When a taxpayer requests to speak with a specific employee who previously handled the inquiry or request, or complains about the level of service previously provided, every attempt should be made to resolve the taxpayer’s inquiry. If the issue cannot be resolved, the employee should refer the inquiry using established procedures to his or her manager.

Correspondex letters will require a specific employee name and telephone number only if the employee initiating the correspondence is in the best position to respond to any questions that the taxpayer may have about the correspondence, or the employee is asking the taxpayer to provide additional case-related information.

Otherwise, if the taxpayer does not need to contact a specific employee, the correspondence needs only an IRS telephone number and standard signature.

It is not necessary to repeat the ID card number (badge) on a subsequent contact, when the nature of an employee’s work involves multiple contacts with the same taxpayer, and the employee has given the taxpayer (either telephone or in-person) their ID card (badge) number on the first contact.

When contacting taxpayers by telephone, you must be sure you are speaking with the taxpayer or authorized representative before disclosing tax information. See IRM 21.1.3.2.3, Required Taxpayer Authentication and IRM 21.1.3.2.4, Additional Taxpayer Authentication. Also, before leaving a message on a taxpayer’s answering machine, review IRM 11.3.2.6.1, Leaving Information on Answering Machines or Voice Mail.

IRC § 6103 establishes the taxpayer's (T/P's) right to privacy of tax information. You must be sure that you provide correct information to the correct T/P or authorized representative (check Command Code (CC) CFINK on the Integrated Data Retrieval System (IDRS) for the Power of Attorney (POA).

Taxpayer returns and return information must remain confidential as provided for in IRC § 6103,Confidentiality and disclosure of returns and return information. IRC § 7431 provides civil damages for unauthorized disclosure of returns and return information. IRC § 7213 and 7213A provide criminal penalties for unauthorized disclosure or unauthorized inspection of returns and return information and require employees be discharged from duty if charged and convicted of these offenses.

For more information on General Disclosure Guidelines refer to IRM 21.1.3,Operational Guidelines Overview and for full discussions refer to IRM 11.3.1 through IRM 11.3.40,Disclosure of Official Information.

Issue correspondence to resolve any conditions causing the return to be unworkable or unprocessable.

Examine the return so that all of the conditions can be included in the same correspondence.

Edit marks are edited on the return for transcription to the Automated Data Processing (ADP) System through Integrated Submission and Remittance Processing (ISRP). The editing can be entered in brown, red, orange, purple or green pencil/pen.

The only items edited on the return are those to be transcribed except where specific instructions require editing of a non-transcribed item. Lines are left blank if the entry would be a zero amount unless otherwise instructed.

The original entry on a return is never obliterated, altered or erased when deleting or correcting an entry. Always exercise care to ensure that the original entry remains legible. Perfected entries provide a legible "edit trail" for anyone who may work with the return later.

For a description of specific edit marks, see the table below:

Foreign buyers and/or sellers of U.S. real property interests need identifying numbers to obtain reduced withholding or pay tax. Here’s guidance for those who need to request Individual Taxpayer Identification Numbers (ITINs).

Foreign buyers and sellers of U.S. real property interests need Taxpayer Identification Numbers (TINs) to request reduced tax withholding when disposing of the property interest, and to pay any required withholding. Individuals who do not qualify for Social Security Numbers (SSN) may obtain Individual Taxpayer Identification Numbers (ITINs) to meet the requirement to supply a TIN.

The Internal Revenue Service implemented new procedures, effective December 17, 2003, to strengthen controls on ITINs and ensure the numbers are issued for tax administration purposes only. To help your qualifying clients obtain ITINs without undue burden, see the instructions for Form W-7 and Form W-7 (SP) and the information below, which describes how the new process impacts FIRPTA (Foreign Investment in Real Property Tax Act) processing.

TINs required for withholding (Form 8288 and Form 8288-A ) - Treasury Decision 9082 (effective August 5, 2003) requires all transferees (buyers) and foreign transferors (sellers) of U.S. real property interests to provide their TINs, names and addresses on withholding tax returns, applications for withholding certificates, notice of non-recognition, or elections under sections 897(i) when disposing of a U.S. real property interest. The transferee withholds tax under IRC § 1445 and remits it to the Internal Revenue Service on Form 8288, U.S. Withholding Tax Return for Dispositions by Foreign Persons of U.S. Real Property Interest, and Form 8288-A, Statement of Withholding on Dispositions by Foreign Persons of U.S. Real Property Interests (FIRPTA).

TINs required for requests for reduced withholding (Form 8288-B) - A transferor looking to reduce or eliminate the FIRPTA withholding amount must file a Form 8288-B, Application for Withholding Certificate for Disposition by Foreign Persons of U.S. Real Property Interests. Since Form 8288-B requires a TIN, a transferor and/or transferee who does not qualify for an SSN may apply for an ITIN by attaching Form 8288-B to Form W-7 and mailing the documents to:

Requesting an ITIN to meet FIRPTA TIN requirements - In order to obtain an ITIN number for FIRPTA purposes the foreigner must complete Form W-7 or Form W-7 (SP). Select Box "h" (other) in the "Reason you are submitting Form W-7" section of Form W-7, and Exception 4 (explained in the instructions). Write "Exception 4" in the write-in area to the right of Box h (other).

ITIN requests to claim reduced withholding (Form 8288-B) - The IRS will only issue ITINs based on applications that are complete and demonstrate a tax need for the numbers. If the IRS rejects the ITIN application, Form 8288-B will not be processed. The IRS ITIN Unit will notify the applicant by mail that the Form W-7 was not processed and the FIRPTA Unit in Ogden Accounts Management Campus (OAMC) will send Letter 3793 (SC/CG) to the transferee and foreign transferor with instructions to complete Form W-7 and reapply. This letter will include instructions to resolve the issue outlined in the ITIN rejection letter. When reapplying, the applicant must include a copy of Letter 3793 SC/CG with Form W-7 to be considered under Exception 4. If the reason for rejection cannot be resolved, then the transferee must file Form 8288 and Form 8288-A and remit the 10% tax.

ITIN requests to pay withholding on Form 8288 and Form 8288-A:

Foreign Investment in Real Property Tax Act (FIRPTA) and Foreign Partnership information statements (Form 8288-A and Form 8805) are stored on an Enterprise Tier II SUN system. It is on an ORACLE platform accessed through Info Connect via a Hummingbird TELNET session (also known as "Exceed" ) to connect to the Data Base, known as the "INTL WebApps" Database.

The INTL WebApps Database consist of four applications. They are:

Contained within the 4 applications are a series of MENUs, which are used to access the data entry screens. However, you will not be using all of the menus shown.

The "FIRPTA Database" is "Option 1" on the "Section 1445–1446 Menus" screen. Once this option is selected you will be re-directed to the FIRPTA Menu screen where you will select:

The "Project 1446" is "Option 2" on the "Section 1445–1446 Menus" screen. Once this option is selected you will be re-directed to the Foreign Tax Returns Section 1446 Withholding Main Menu Selections screen where you will select:

The Database is a "user friendly" Database with push-button or data entry fields. Please refer to your Job Aid for guidance on entering Form 8288-A and Form 8805 data to the Database, or when doing credit verifications.

The information captured in the FIRPTA Database is used to;

The INTL WebApps Database is not a Master File program and does not interface with IDRS, Master File, or Non-Master File.

Refer to IRM 3.21.15, International Returns and Document Analysis - Foreign Partnership Withholding, and/or IRM 3.21.261, International Returns and Documents Analysis - Foreign Investment in Real Property Tax Act (FIRPTA) for instructions related to any attachments. The title of the subsection is "Routing Guide for Attachments."

Prior to Integrated Submission and Remittance Processing (ISRP) the Batch Block Tracking System (BBTS) routing should be setup. The Batch work is forwarded to the FIRPTA unit. The FIRPTA unit will:

Every Form 8288 must have one set (Copy A and B) of Form 8288-A attached to it for each number of Form 8288-A listed on Line 4 of Form 8288.

If, as in the example above only 3 Copies (either A or B) are attached (No sets) you must photocopy each Form 8288-A to complete 3 sets. Edit the name of each of the 3 sets by crossing out (use red ink) two transferor names, and dividing the amount realized and withholding tax into one third for each transferor. The end result will be three sets of Form 8288-A (one for each transferor).

If Form 8288-A is not completely filled out, then review Form 8288 for the information and edit it onto Form 8288-A. If unable to locate the information, or Form 8288-A is/aren't attached, then correspond for the required information. However, when a phone number is present, call the taxpayer and have them FAX the information to you. If the telephone number is an international number do not call, but correspond.

If Form 8288-A is incomplete, and you are unable to complete it with the information available on the attached Form 8288, then request the information from the transferee using Correspondence Action Sheet (CAS) 3104C.

Loose Forms 8288-A with green check mark: Some title companies, transferees, escrow companies, Certified Public Accountants (CPAs), attorneys and realtors may send FIRPTA payments to deposit activity areas without a Form 8288. Transship loose Form 8288-A documents to PAMC BMF INT'L unit at BLN 3-L08.154.

Loose Forms 8288-A: AUSPC ITIN function will at times transship to OSPC copies of Form 8288-A with the assigned ITIN number written in red ink. Research the Form 8288-A on the pending wall to see if there is an Form 8288-A awaiting to be mailed. If so, follow the IRM procedures in IRM 3.21.25.13.2. If not, then draft FIRPTA Quickie Note 3302 SC/CG (addressed to withholding agent) and select checklist item, "Other" Write the following narrative in the open paragraph field: "We are returning the attached loose Form 8288-A. Please complete Form 8288 and/or Form 8288-A (Copy A and B) and attach the withholding payment to it and mail it to the Internal Revenue Service, Ogden, UT 84201."

Any foreign individual or entity that has sold a U.S. Real Property Interest (USRPI) is required to file a U.S. income tax return to claim the credit or refund of the FIRPTA tax withheld. The return can be a Form 1040, Form 1040-NR (Individual or Estate or Trust), Form 1120-F, Form 990-T, or Form 8804.

FIRPTA credit verifications identified in Code and Edit are to be verified within 48 hours of receipt. FIRPTA credit verifications received from another function (Rejects, Error Resolution (ERS), Accounts Management, etc.) must also be verified within 48 hours and returned to the originator on Form 3210. Document the credit verification amount on Form 13698, and update the Form 8288-A Database "Credit Verification" section of the Form 8288-A screen with the "Form #," "Tax Period," and "Money amount" when the tax paid button is depressed.

Never verify more FIRPTA credit than what appears in the Form 8288-A Database. If the taxpayer claims less credit on the return, then verify only up to the amount claimed.

Verification Procedures: Generally, you must:

After all action has been taken, complete the credit verification slip, Form 13698 and staple it to the front of the income tax return. The following information must be entered on Form 13698:

The w/h agent information on the paper Form 8288-A may differ from the Database, because the Database shows the Form 8288 transferee information, whereas the Form 8288-A may show the title company information. Either way it appears is correct. Continue to verify the credit.

When it is necessary to verify credits claimed on Form 1040-NR, Form 8804, Form 990-T, Form 1040-NR Estate or Trust, and Form 1120-F under IRC § 1446, the following steps should be taken:

If the search does not locate a Form 8805, it will be necessary to research the Form 8804 and Form 8813 files under the Partnership EIN, or the ANMF system.

Upon verification the information must be annotated on the credit verification slip. The following information must be entered:

If there is a discrepancy between the credits being claimed on the return and the Database information, return to originator.

Inform the originator that correspondence is needed with the PARTNERSHIP/WITHHOLDING AGENT.

If after research is completed and credits cannot be verified, return the income tax return to the originator, annotated with the following: "THERE ARE NO CREDITS AVAILABLE, " TE Profile Number and current date.

Beginning with tax period ending 12/31/2004, Form 8805 is recorded in a separate table in the Project 1446 Database. This data is subsequently transmitted to the Martinsburg Computing Center (MCC) for posting to the information Returns master File (IRMF). This occurs in cycle 49.

Forms 8805 submitted with Forms 8804 are detached from Form 8804, batched, numbered (60546 DLN), and forwarded to the FIRPTA unit at the OSPC for processing to the INTL WebApps Database.

If Form 8804-C,Certificate of Partner-Level Items to Reduce Section 1446 Withholding or a Statement under Treasury Regs 1.1446-6 is attached to Form 8805, then detach it from the Form 8805 and transship it to;

Internal Revenue Service
4-F23.142 Examination Branch
2970 Market St.
Philadelphia, PA 19104

After, YOU HAVE ENTERED " Y" IN THE "8804-C CERT" FIELD, otherwise, if no Form 8804-C is attached to the Form 8805, then the "8804-C CERT" field on the IRMF 8805 record entry screen will remain with a Default" N" in the field.

A new Form 8805 menu identified as IRMF Form 8805 (TP 200412 and Subsequent) will appear on the Project 1446 menu screen as "Option 7" to record the data.

To improve data entry efficiency, the computer will store the foreign partners information into a partner table. The computer will import the name and address of the foreign partner into the Form 8805 record if it has been previously established. If not previously established, then you will need to enter it.

Compare the imported data from the partners table against the paper Form 8805 to ensure that the most current foreign partner information is recorded. If different, then delete the incorrect information and enter the correct information.

Special procedures are required for beneficiaries of foreign estates or trusts to claim credits that flow through to them from the estate or trust. The estate or trust must issue the beneficiary a Form 8805 with a completed Schedule T. The beneficiaries must attach a copy of the form to their return to claim the section 33 credit for section 1446 withholding tax paid by the partnership.

The MFT for processing Form 8804 to the Master File will continue to be "08," and the program code will be 11340.

This subsection provides coding and editing instructions for the NMF Form 1040NR, U.S. Nonresident Alien Income Tax Return (Estate or Trust) to the Non Master File (NMF). These returns are filed to report income received by foreign Estates or Trusts.

Form 1040NR Estate or Trust is processed under:

Batch Block Tracking System (BBTS) routing Sub-Program 75702:

All Form 1040NR Estate or Trust returns are processed to the Non-Master File (NMF) database at the Cincinnati Submission Processing Center (CSPC).

under Master File Tax (MFT) 20.

Each Estate or Trust return must have an Employer Identification Number (EIN). If a Social Security or Individual Tax Identification Number (SSN or ITIN) appears at the top of the return instead of an EIN, then Form 1040NR was filed by a Non-Resident Alien (NRA) individual. A 1040NR return filed by a NRA is to be processed on the Individual Master File (IMF). Transship the IMF NRA 1040NR return to the Austin Submission Processing Center (AUSPC). Prepare Form 3210, Document Transmittal and mail to:

Department of the Treasury
Internal Revenue Service Center
Austin, TX 73301-0215 U.S.A.