FIRPTA does not apply to U.S. sellers under IRC §1445. That point is clear.
The compliance issue that arises in practice is not applicability, but timing. Under 26 U.S. Code §1445(b)(2), a buyer (transferee) is not required to withhold FIRPTA tax if the seller (transferor) furnishes an affidavit stating under penalty of perjury the seller's U.S. taxpayer identification number and that the seller is not a foreign person. A verbal statement or informal understanding is not sufficient.
IRS guidance is explicit that buyer liability depends on possession of this affidavit.
When seller status is not confirmed until the eve of closing, withholding decisions are forced into a compressed timeline, often after documents are already prepared. This is why FIRPTA questions frequently surface late in the process, particularly when seller residency, ownership structure, or tax identification information has not been reviewed at the document stage.
Every closing should include this affidavit, even if the seller is presumed to be a U.S. person. Confirming seller status early allows withholding obligations (or exemptions) to be addressed well before closing pressure exists.
For title and settlement professionals, FIRPTA compliance is driven by documentation and timing, not by intent or assumptions.
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Kat Rodgers
Foreign Tax CPA, LLC
Cocoa Beach FL
+1 (321) 784-8329
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