To date, the Service Center has refused to grant the credit because it has no record of receiving the amount withheld from the buyer, as in fact the buyer had not paid over the amount withheld. tax return on which it sought a credit in the amount withheld against his tax liability, and sought a refund of the excess amount withheld. Consequently, the nonresident alien seller did not receive a stamped copy of Form 8288-A from the IRS. However, the buyer did not pay over the amount withheld to the IRS. The buyer withheld 10% of the amount realized on the sale, as required under IRC section 1445(a) and Treas. Here is a written explanation that you can provide to the Service Center in bringing resolution to your case.ДЄ nonresident alien sold real property located in the United States, which is a United States real property interest (USRPI) as defined in IRC section 897(c)(1)(A)(i) and Treas. Thanks for your patience while I coordinated with the IRC section 1445 experts within Counsel (* * *). Now.вЂќ (More or less thatвЂ™s what will happen when the IRS comes knocking at the buyerвЂ™s door.) The IRS email advice вЂњItвЂ™s Uncle SamвЂ™s money, you have it, so gimme.

That buyer is going to visit the House of Pain soon. The buyer is sitting on 10% of the purchase price, money that should have gone to the U.S.

And in this case, the nonresident seller was entitled to a tax refund. In the email reproduced below, the IRS says that the nonresident seller will get credit for the tax withholding from the IRS. What happens if the buyer withholds the 10% but never pays it over to the IRS? If the tax liability is less than the amount of tax withheld and remitted to the IRS, the nonresident seller gets a refund of the difference. income tax return, and reports the capital gain and his/her/its actual tax liability. The buyer then gives that money to the IRS. This is achieved by forcing the buyer to withhold 10% of the purchase price. real estate, Uncle Sam wants to be sure to collect tax on the capital gain that the nonresident makes. In emailed advice released today on Tax Notes Today (2010 TNT 137-56 for you TNT fans) the IRS issued a rare written piece of information on FIRPTA withholding. JPhil Hodgen Foreign Business Activities in the USA, US Real Estate Investments FIRPTA withholding credit given even when the IRS didnвЂ™t get the money

Irc 1445