Important Update for Non-U.S. Sellers and FIRPTA Transactions
Effective September 30, 2025, the Internal Revenue Service will discontinue the issuance of paper refund checks. This policy change will directly impact non-U.S. persons receiving tax refunds related to the disposition of U.S. real property interests.
As an international CPA firm specializing in FIRPTA compliance, we advise all foreign sellers, legal advisors, and title professionals to prepare accordingly.
Key Implications:
- All tax refunds will be issued electronically - via direct deposit to a U.S. bank account only.
- This change applies to:
- Refunds from Form 8288-A & Withholding Certificates
- Refunds from Form 1040NR and Form 1120-F tax returns
- Paper checks will no longer be available, even upon request.
- The IRS will not deposit refunds into foreign accounts, nor will it remit funds by international wire.
What You Need to Know:
As an international CPA firm representing non-U.S. sellers, we strongly advise all stakeholders - including legal counsel, title companies, and foreign clients - to prepare for this transition now:
- Establish a U.S. bank account early in the transaction process.
- Where that is not feasible, explore the use of a qualified intermediary or escrow agent with refund disbursement capabilities.
- Communicate this update clearly to foreign sellers closing in late 2025 or thereafter to avoid refund delays.
This change underscores the IRS's shift toward full electronic payment systems and heightened fraud prevention protocols.
If you have questions about how this impacts your FIRPTA transaction or client, please contact our office.
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Kat Rodgers
Foreign Tax CPA, LLC
Cocoa Beach FL
+1 (321) 784-8329
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