Letter from FIRPTA TAX Team asking you to provide the ITIN number within 60 days FOR FOREIGN SELLER ON SALE OF U.S. HOUSE, CONDO OR ANY U.S.A PROPERTY. What do you need to do?
Why I have received a letter 3794 from the FIRPTA tax team?
FIRPTA team would be sending the letter 3794 to the foreign person/nonresident/non-US citizen notifying that the FIRPTA team is unable to mail the valid Form 8288-A Copy B, statement of Withholding on Disposition of by Foreign persons of U.S Real Property Interests (USRPI) because the escrow team or the seller of the US property did not provide a valid ITIN or US Tax Identification number. Please note its important for the foreign seller of USA-based property to have a U.S TIN or ITIN to file a U.S Income tax return for declaring the sale of property reporting.
What is FIRPTA?
FIRPTA stands for Foreign Investment in Real Property Tax Act and it is the Federal law governing the taxation & withholding by foreign persons selling US real estate.
Under FIRPTA, the buyer is required to withhold either 10% or 15% of the gross sales price from proceeds as a “deposit” due to IRS within 20 days after closing; when purchasing from a foreign seller (See below certain exceptions apply).
A “foreign person” is defined under FIRPTA includes all of the below:
Foreign Nationals Citizens/Nonresident alien individuals,
Foreign estate.
Foreign corporation,
Partnership,
Trust
What do I need to do when I receive this letter 3794 from the FIRPTA team?
The FIRPTA team letter would state you need to reply back with an ITIN number response to the letter within 60 days. From our experience as IRS approved acceptance agent for over 10 years now, we have assisted many foreign persons on FIRPTA tax reclaim Form 8288A FIRPTA withholding tax and assisted with the ITIN application process with a 100% success rate.
As the ITIN application process could take between 6 to 12 weeks for approval, it is unlikely you can respond back to the letter within 60 days and the FIRPTA team does not penalize for the late response. You can 3 options here:
Option 1 – Call the FIRPTA team at +1 801-820-7584 and notify the team you are in the process of applying for ITIN and buy an additional 3 months' time.
Option 2 – Write back a letter and post it to the FIRPTA team at this address “Internal Revenue Service, P.O Box 409101, Ogden, UT 84409, USA” requesting the team you are in the process of applying for ITIN and buy an additional 3 month time.
Option 3 – Start the ITIN application process via an acceptance agent who submits the relevant forms and gets the ITIN number, on receipt of ITIN the foreign seller can write the response letter with the ITIN number to this address “Internal Revenue Service, P.O Box 409101, Ogden, UT 84409, USA”.
For more information on the FIRPTA exemption claim process please refer to this blog.
Our team specialises in ITIN, EIN, and US international expatriate U.S. personal tax return service. If you need assistance with US 1040 filing for refund claim/FATCA Compliance work/FBAR FINCEN114 Filing, ITIN/ Form W7 Application/EIN/Form W8BENE or CAA services/1040NR U.S. tax filing for refund claim of excess 1042S / 8288A/ 8805/ W2/ 1099. We are happy to assist our clients in a timely, efficient, and cost-effective way.
Please visit our website for FAQ related to ITIN and US Tax Assistance.
