Applications for FIRPTA Withholding Certificates
Use Form 8288-B, Application for Withholding Certificate for Dispositions by Foreign Persons of U.S. Real Property Interests to apply for a withholding certificate under categories (1), (2), and (3).
The application must be signed by the individual or a duly authorized agent (with a copy of the power of attorney, such as Form 2848, attached), a responsible officer in the case of a corporation, a general partner in the case of a partnership, or a trustee, executor, or equivalent fiduciary in the case of a trust or estate. The person signing the application must verify under penalties of perjury that all representations are true, correct, and complete to that person's knowledge and belief. If the application is based in whole or in part on information provided by another party to the transaction, that information must be supported by a written verification signed under penalties of perjury by that party and attached to the application.
The application must be sent to:
Internal Revenue Service Center
P.O. Box 409101
Ogden, UT 84409
All applications for withholding certificates must use the following format. The information must be provided in paragraphs labeled to correspond with the numbers and letters set forth below. If the information requested does not apply, place "N/A" in the relevant space.
- Information on the application category:
- State which category describes the application (Refer to Categories),
- If a category (4) application:
- State whether the proposed agreement secures (A) the transferor's maximum tax liability, or (B) the amount that would otherwise have to be withheld, and
- State whether the proposed agreement and security instrument conform to the standard formats.
- Information on the transferee or transferor:
- State the name, address, and Taxpayer Identification Number (TIN) of the person applying for the withholding certificate (if this person does not have a TIN and is eligible for an Individual Taxpayer Identification Number (ITIN), he or she can apply for the ITIN by attaching the application to a completed Form W-7 and forwarding the package to the address given in the Form W-7 instructions).
- State whether that person is the transferee or transferor, and
- State the name, address and TIN of all other transferees and transferors of the U.S. real property interest for which the withholding certificate is sought.
- Information on the U.S. real property interest for which the withholding certificate is sought, state the:
- Type of interest (such as, interest in real property, in associated personal property, or in a domestic U.S. real property holding corporation),
- Contract price,
- Date of transfer,
- Location and general description (if an interest in real property),
- Class or type and amount of the interest in a U.S. real property holding corporation, and
- Whether in the three preceding tax years: (1) U.S. income tax returns were filed relating to the U.S. real property interest, and if so, when and where those returns were filed, and if not, why returns were not filed, and (2) U.S. income taxes were paid relating to the U.S. real property interest, and if so, the amount of tax paid.
- Provide full information concerning the basis for the issuance of the withholding certificate. Although the information to be included in this section of the application will vary from case to case, the following rules provide general guidelines for the inclusion of appropriate information for each category of application.
If the application is based on an agreement for the payment of tax, the application must include:
- Information establishing the transferor's maximum tax liability, or the amount that otherwise has to be withheld,
- A signed copy of the agreement proposed by the applicant, and
- A copy of the security instrument proposed by the applicant.
Either the transferee or the transferor may enter into an agreement for the payment of tax. The agreement is a contract between the IRS and any other person and consists of two necessary elements. Those elements are:
- A detailed description of the rights and obligations of each, and
- A security instrument or other form of security acceptable to the Commissioner or his delegate.
For more information on the agreement for the payment of tax, including a sample agreement, refer to section 5 of Revenue Procedure 2000-35. Revenue Procedure 2000-35 is in Cumulative Bulletin 2000-2.
There are four major types of security acceptable to the IRS. They are:
- Bond with surety or guarantor,
- Bond with collateral,
- Letter of credit, and
- Guarantee (corporate transferors).
The IRS may, in unusual circumstances and at its discretion, accept any additional form of security that it finds to be adequate.
For more information on acceptable security instruments, including sample forms of these instruments, refer to section 6 of Revenue Procedure 2000-35
A blanket withholding certificate may be issued if the transferor holding the U.S. real property interests provides an irrevocable letter of credit or a guarantee and enters into a tax payment and security agreement with the IRS. A blanket withholding certificate excuses withholding concerning multiple dispositions of those property interests by the transferor or the transferor's legal representative during a period of no more than 12 months.
For more information, refer to section 9 of Revenue Procedure 2000-35
These are non-standard applications and may be of the following types.
Agreement for Payment of Tax with Nonconforming Security
An applicant seeking to enter into an agreement for the payment of tax but wanting to provide a non-conforming type of security must include the following in the application:
- The information required for Category (4) applications, discussed earlier,
- A description of the nonconforming security proposed by the applicant, and
- A memorandum of law and facts establishing that the proposed security is valid and enforceable and that it adequately protects the government's interest.
Other Nonstandard Applications
An application for a withholding certificate not previously described must explain in detail the proposed basis for the issuance of the certificate and set forth the reasons justifying the issuance of a certificate on that basis.
Availability of Records
The applicant must make available to the IRS, within the time prescribed, all information required to verify that representations relied upon in accepting the agreement are accurate, and that the obligations assumed by the applicant will be performed pursuant to the agreement. Failure to provide requested information promptly will usually result in rejection of the application, unless the IRS grants an extension of the target date.
An applicant for a withholding certificate may amend an otherwise complete application by sending an amending statement to the Director, Ogden Service Center, at the address shown earlier. There is no particular form required, but the amending statement must provide the following information:
- The name, address, and taxpayer identification number (if any) of the person providing the amending statement specifying whether that person is the transferee or transferor,
- The date of the original application for a withholding certificate that is being amended,
- A brief description of the real property interest for which the original application for a withholding certificate was provided, and
- The basis for the amendment including any change in the facts supporting the original application for a withholding certificate and any change in the terms of the withholding certificate.
The statement must be signed and accompanied by a penalties of perjury statement.
If an amending statement is provided, the time in which the IRS must act upon the application is extended by 30 days. If the amending statement substantially changes the original application, the time for acting upon the application is extended by 60 days. If an amending statement is received after the withholding certificate has been signed by the Director, Ogden Service Center, but has not been mailed to the applicant, the IRS will have a 90-day extension of time in which to act.
- FIRPTA Withholding
- Exceptions from FIRPTA Withholding
- Reporting and Paying Tax on U.S. Real Property Interests
- Withholding Certificates
- Road Map to Regulations
- Definitions of Terms and Procedures Unique to FIRPTA