FIRPTA Buyer's Closing Package, a/k/a FIRPTA Remittance Filing Package
- Richard Kahn
- Sep 19, 2024
- 2 min read
Every successful FIRPTA transaction begins with one critical responsibility.
The buyer must satisfy the IRS withholding, filing, and remittance requirements imposed under FIRPTA.
Our FIRPTA Closing Remittance Package (BCP) is designed to help buyers, closing agents, attorneys, Realtors, and settlement professionals complete that responsibility accurately and confidently.
The First of Three Typical FIRPTA Phases
The FIRPTA Closing Remittance Package (BCP) represents the first of three typical phases in a FIRPTA transaction.
Its purpose is to help buyers properly satisfy their FIRPTA withholding responsibilities while helping foreign sellers move toward a successful closing.
Why This Service Matters
Under FIRPTA, buyers are generally responsible for withholding the applicable amount from the foreign seller's proceeds and remitting those funds to the IRS.
The applicable withholding rate depends on the transaction and may range from 0% to 15%, depending on the facts and applicable IRS rules.
Failure to properly comply may expose buyers to the withholding tax itself, together with applicable interest and penalties.
More Than Preparing IRS Forms
Our role extends well beyond preparing Forms 8288 and 8288-A.
When engaged, we typically:
Prepare the required FIRPTA documents.
Act as the paid preparer.
Coordinate with buyers, attorneys, closing agents, and settlement professionals.
Provide written filing and remittance instructions.
Help guide the FIRPTA process through closing.
Serve, when appropriate, as the IRS correspondence recipient for foreign sellers located outside the United States.
The real value lies in evaluating the transaction before deciding what should be filed, how it should be filed, and whether a better lawful alternative exists.
Experience Helps Prevent Costly Delays
When FIRPTA responsibilities are handled without experienced guidance, mistakes can occur.
Those mistakes may:
Delay ITIN processing.
Delay tax refunds.
Generate unnecessary IRS correspondence.
Complicate documentation after closing.
Increase compliance risks for everyone involved.
Our objective is simple:
Help clients complete the FIRPTA process correctly the first time.
Foreign Sellers Can Often Close Without an ITIN
Many foreign sellers are surprised to learn they generally do not need an ITIN to complete the closing.
With proper planning, the transaction can proceed while the ITIN application is completed through the appropriate IRS procedures afterward.
As an IRS Certified Acceptance Agent, we also assist eligible clients with ITIN applications and related FIRPTA filings.
The Bottom Line
The FIRPTA Closing Remittance Package (BCP) is more than a document preparation service.
It is a transaction planning and compliance service designed to help buyers, sellers, attorneys, Realtors, and closing professionals complete FIRPTA requirements accurately while minimizing unnecessary delays and compliance issues.
Because successful FIRPTA transactions begin long before the first IRS form is ever prepared.
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