Open Forum

I hate to jump on the bandwagon, but after the number of calls I've gotten from panicked closing agents, I figured this was a good time to share my take on the executive order everyone's buzzing about. Apologies in advance for the long post.

Yes, it's true that starting September 30, 2025, the executive order says tax payments to and from the IRS should be electronic. But unless I'm missing something, it doesn't say it has to be through EFTPS. It just says electronic. That leaves the door open for other methods like same-day wire payments or maybe even new systems the IRS will roll out between now and then. While EFTPS is the most common platform right now, it's not the only option.

According to the order, the Treasury Secretary is supposed to issue an implementation report by September 21, 2025, and then the rollout begins. Let's be honest though, given how government timelines tend to go, I'd be shocked if everything is fully in place, perfectly functioning, and strictly enforced by 12:01 AM on October 1st. It's not like the IRS is going to start shredding paper checks the moment that clock strikes midnight. There will almost certainly be a transition period.

Now let's talk about how FIRPTA withholding actually works from a tax reporting perspective. Withholding taxes, whether it's payroll, backup, or FIRPTA, are always credited to the withholding agent's TIN based on what's shown on the return. For FIRPTA, form 8288 is the buyer's tax return. So, the withholding will first be credited to the buyer's TIN. After that, the IRS allocates the withheld funds to the foreign sellers based on how the 8288-As are filled out.

Here's where things get messy. A traditional EFTPS account is linked to one taxpayer and one bank account. Since the buyer is the withholding agent, the IRS expects the payment to come from their EFTPS account tied to their TIN. That means the closing agent has to wire the FIRPTA funds from their escrow account into the buyer's personal bank account so the buyer can make the payment. There's no way around it. This creates obvious risks, and of course, only works if the buyer has a TIN in the first place.

Now, if your company already has an EFTPS account and you're planning to use it to pay the FIRPTA tax, that creates its own set of issues. Since EFTPS accounts are tied to a single taxpayer and bank account, any payment made through your company's EFTPS will be linked to your company's TIN. That means the IRS will see your company as the withholding agent. Meanwhile, the FIRPTA forms (if done correctly) will show the buyer's name and TIN. So, you end up with a tax return (Form 8288) filed under the buyer's TIN, but the payment credited to your company's TIN. This mismatch is exactly what triggers those "payment due" notices you've probably seen, which can lead to penalties for the buyer and delays in the seller's refund.

So, what's the plan? Tax professionals use EFTPS batch provider software that lets them make payments for multiple clients under one login. To my knowledge, it's not available to non-tax professionals yet, but maybe that's one of the changes we'll see moving forward. 

It's also worth noting that electronic FIRPTA payments aren't new, they've always been an option. Take the same day wiring option for example. This wiring method allows you, the closing agent, to make a payment on behalf of another taxpayer, which means you can correctly list the buyer as the taxpayer and enter the accounting period (which is the closing month and year, not just the tax year like we're used to for domestic filings). As you can imagine, one small input error can throw everything off. Here's a link to the worksheet if you're curious: SAME DAY WIRE

At Total FIRPTA, we're exploring a setup where we receive the FIRPTA funds directly into our "escrow" account (which feels a lot safer than wiring money to the buyer) and then submit the payment electronically using our batch provider access. Since FIRPTA forms still need to be mailed separately, we'll handle that part too if needed. We're already doing this with escrow checks and money orders, so it should be a smooth transition. I imagine we'll use an escrow agreement and charge a small fee like usual. We're testing the process now so we're ready when (and if) it becomes mandatory. We work nationwide, so I'd love your feedback on how this strategy might work (or not work) in your state.

My hope in sharing these thoughts is to bring a bit more clarity to an issue that's causing real concern. I don't claim to have all the answers-none of us do-but I've spent enough time in the FIRPTA trenches to know that thoughtful preparation beats panic every time. We're all trying to ready ourselves for what's ahead, and the more we share what's working (and what's not), the better equipped we'll all be.

Let's keep the dialogue open and constructive. I'm happy to answer questions or hear what you're planning on your end.

Julie!!

How are you... hope to see you soon, you are correct, while the Electronic Federal Tax Payment System (EFTPS) is not explicitly mandated as the sole method for electronic payments, it is a primary and recommended system for making federal tax payments, as it supports payments for income, employment, estimated, and excise taxes for both individuals and businesses.

The relevant regulation governing electronic federal tax payments, including the use of EFTPS, is found in 31 CFR Part 203, Subpart B-Electronic Federal Tax Payments. Specifically:

• § 203.10 Electronic payment methods: This section outlines that electronic payment methods for federal tax payments include ACH debit entries, ACH credit entries, and same-day payments, which are facilitated through systems like EFTPS. It does not mandate EFTPS exclusively but establishes it as a key mechanism for compliance with electronic payment requirements.

• EFTPS is highlighted as a free service provided by the U.S. Department of the Treasury, in operation since 1996 per Internal Revenue Code (IRC) Section 6311, which authorizes the Secretary of the Treasury to prescribe regulations for the payment of taxes by electronic means. EFTPS is described as a secure and convenient option for scheduling payments up to 365 days in advance, accessible via phone or online, and is emphasized in IRS guidance for its security and reliability.

Of course all of us in this industry are monitoring developments and updates for specifically FIRPTA deposits.

I hate to jump on the bandwagon, but after the number of calls I've gotten from panicked closing agents, I figured this was a good time to share my take on the executive order everyone's buzzing about. Apologies in advance for the long post.

Yes, it's true that starting September 30, 2025, the executive order says tax payments to and from the IRS should be electronic. But unless I'm missing something, it doesn't say it has to be through EFTPS. It just says electronic. That leaves the door open for other methods like same-day wire payments or maybe even new systems the IRS will roll out between now and then. While EFTPS is the most common platform right now, it's not the only option.

According to the order, the Treasury Secretary is supposed to issue an implementation report by September 21, 2025, and then the rollout begins. Let's be honest though, given how government timelines tend to go, I'd be shocked if everything is fully in place, perfectly functioning, and strictly enforced by 12:01 AM on October 1st. It's not like the IRS is going to start shredding paper checks the moment that clock strikes midnight. There will almost certainly be a transition period.

Now let's talk about how FIRPTA withholding actually works from a tax reporting perspective. Withholding taxes, whether it's payroll, backup, or FIRPTA, are always credited to the withholding agent's TIN based on what's shown on the return. For FIRPTA, form 8288 is the buyer's tax return. So, the withholding will first be credited to the buyer's TIN. After that, the IRS allocates the withheld funds to the foreign sellers based on how the 8288-As are filled out.

Here's where things get messy. A traditional EFTPS account is linked to one taxpayer and one bank account. Since the buyer is the withholding agent, the IRS expects the payment to come from their EFTPS account tied to their TIN. That means the closing agent has to wire the FIRPTA funds from their escrow account into the buyer's personal bank account so the buyer can make the payment. There's no way around it. This creates obvious risks, and of course, only works if the buyer has a TIN in the first place.

Now, if your company already has an EFTPS account and you're planning to use it to pay the FIRPTA tax, that creates its own set of issues. Since EFTPS accounts are tied to a single taxpayer and bank account, any payment made through your company's EFTPS will be linked to your company's TIN. That means the IRS will see your company as the withholding agent. Meanwhile, the FIRPTA forms (if done correctly) will show the buyer's name and TIN. So, you end up with a tax return (Form 8288) filed under the buyer's TIN, but the payment credited to your company's TIN. This mismatch is exactly what triggers those "payment due" notices you've probably seen, which can lead to penalties for the buyer and delays in the seller's refund.

So, what's the plan? Tax professionals use EFTPS batch provider software that lets them make payments for multiple clients under one login. To my knowledge, it's not available to non-tax professionals yet, but maybe that's one of the changes we'll see moving forward. 

It's also worth noting that electronic FIRPTA payments aren't new, they've always been an option. Take the same day wiring option for example. This wiring method allows you, the closing agent, to make a payment on behalf of another taxpayer, which means you can correctly list the buyer as the taxpayer and enter the accounting period (which is the closing month and year, not just the tax year like we're used to for domestic filings). As you can imagine, one small input error can throw everything off. Here's a link to the worksheet if you're curious: SAME DAY WIRE

At Total FIRPTA, we're exploring a setup where we receive the FIRPTA funds directly into our "escrow" account (which feels a lot safer than wiring money to the buyer) and then submit the payment electronically using our batch provider access. Since FIRPTA forms still need to be mailed separately, we'll handle that part too if needed. We're already doing this with escrow checks and money orders, so it should be a smooth transition. I imagine we'll use an escrow agreement and charge a small fee like usual. We're testing the process now so we're ready when (and if) it becomes mandatory. We work nationwide, so I'd love your feedback on how this strategy might work (or not work) in your state.

My hope in sharing these thoughts is to bring a bit more clarity to an issue that's causing real concern. I don't claim to have all the answers-none of us do-but I've spent enough time in the FIRPTA trenches to know that thoughtful preparation beats panic every time. We're all trying to ready ourselves for what's ahead, and the more we share what's working (and what's not), the better equipped we'll all be.

Let's keep the dialogue open and constructive. I'm happy to answer questions or hear what you're planning on your end.

Just want to give a shoutout to Marc Enzi and Mary Enzi at Tax Solutions - FIRPTA Consulting. Incredibly knowledgeable and sincere folks who genuinely want to be accessible and available resources for all things FIRPTA. Marc just presented for our attendees at the Idaho Land Title Association and made a very complicated subject very digestible and beyond that made sure that our folks had a resource to call for any FIRPTA needs and made it clear that they are happy to answer questions. I see them helping out here in the same way they did for our group all the time and just wanted to show them some love, they are a real friend & asset to the industry.

Julie!!

How are you... hope to see you soon, you are correct, while the Electronic Federal Tax Payment System (EFTPS) is not explicitly mandated as the sole method for electronic payments, it is a primary and recommended system for making federal tax payments, as it supports payments for income, employment, estimated, and excise taxes for both individuals and businesses.

The relevant regulation governing electronic federal tax payments, including the use of EFTPS, is found in 31 CFR Part 203, Subpart B-Electronic Federal Tax Payments. Specifically:

• § 203.10 Electronic payment methods: This section outlines that electronic payment methods for federal tax payments include ACH debit entries, ACH credit entries, and same-day payments, which are facilitated through systems like EFTPS. It does not mandate EFTPS exclusively but establishes it as a key mechanism for compliance with electronic payment requirements.

• EFTPS is highlighted as a free service provided by the U.S. Department of the Treasury, in operation since 1996 per Internal Revenue Code (IRC) Section 6311, which authorizes the Secretary of the Treasury to prescribe regulations for the payment of taxes by electronic means. EFTPS is described as a secure and convenient option for scheduling payments up to 365 days in advance, accessible via phone or online, and is emphasized in IRS guidance for its security and reliability.

Of course all of us in this industry are monitoring developments and updates for specifically FIRPTA deposits.

I hate to jump on the bandwagon, but after the number of calls I've gotten from panicked closing agents, I figured this was a good time to share my take on the executive order everyone's buzzing about. Apologies in advance for the long post.

Yes, it's true that starting September 30, 2025, the executive order says tax payments to and from the IRS should be electronic. But unless I'm missing something, it doesn't say it has to be through EFTPS. It just says electronic. That leaves the door open for other methods like same-day wire payments or maybe even new systems the IRS will roll out between now and then. While EFTPS is the most common platform right now, it's not the only option.

According to the order, the Treasury Secretary is supposed to issue an implementation report by September 21, 2025, and then the rollout begins. Let's be honest though, given how government timelines tend to go, I'd be shocked if everything is fully in place, perfectly functioning, and strictly enforced by 12:01 AM on October 1st. It's not like the IRS is going to start shredding paper checks the moment that clock strikes midnight. There will almost certainly be a transition period.

Now let's talk about how FIRPTA withholding actually works from a tax reporting perspective. Withholding taxes, whether it's payroll, backup, or FIRPTA, are always credited to the withholding agent's TIN based on what's shown on the return. For FIRPTA, form 8288 is the buyer's tax return. So, the withholding will first be credited to the buyer's TIN. After that, the IRS allocates the withheld funds to the foreign sellers based on how the 8288-As are filled out.

Here's where things get messy. A traditional EFTPS account is linked to one taxpayer and one bank account. Since the buyer is the withholding agent, the IRS expects the payment to come from their EFTPS account tied to their TIN. That means the closing agent has to wire the FIRPTA funds from their escrow account into the buyer's personal bank account so the buyer can make the payment. There's no way around it. This creates obvious risks, and of course, only works if the buyer has a TIN in the first place.

Now, if your company already has an EFTPS account and you're planning to use it to pay the FIRPTA tax, that creates its own set of issues. Since EFTPS accounts are tied to a single taxpayer and bank account, any payment made through your company's EFTPS will be linked to your company's TIN. That means the IRS will see your company as the withholding agent. Meanwhile, the FIRPTA forms (if done correctly) will show the buyer's name and TIN. So, you end up with a tax return (Form 8288) filed under the buyer's TIN, but the payment credited to your company's TIN. This mismatch is exactly what triggers those "payment due" notices you've probably seen, which can lead to penalties for the buyer and delays in the seller's refund.

So, what's the plan? Tax professionals use EFTPS batch provider software that lets them make payments for multiple clients under one login. To my knowledge, it's not available to non-tax professionals yet, but maybe that's one of the changes we'll see moving forward. 

It's also worth noting that electronic FIRPTA payments aren't new, they've always been an option. Take the same day wiring option for example. This wiring method allows you, the closing agent, to make a payment on behalf of another taxpayer, which means you can correctly list the buyer as the taxpayer and enter the accounting period (which is the closing month and year, not just the tax year like we're used to for domestic filings). As you can imagine, one small input error can throw everything off. Here's a link to the worksheet if you're curious: SAME DAY WIRE

At Total FIRPTA, we're exploring a setup where we receive the FIRPTA funds directly into our "escrow" account (which feels a lot safer than wiring money to the buyer) and then submit the payment electronically using our batch provider access. Since FIRPTA forms still need to be mailed separately, we'll handle that part too if needed. We're already doing this with escrow checks and money orders, so it should be a smooth transition. I imagine we'll use an escrow agreement and charge a small fee like usual. We're testing the process now so we're ready when (and if) it becomes mandatory. We work nationwide, so I'd love your feedback on how this strategy might work (or not work) in your state.

My hope in sharing these thoughts is to bring a bit more clarity to an issue that's causing real concern. I don't claim to have all the answers-none of us do-but I've spent enough time in the FIRPTA trenches to know that thoughtful preparation beats panic every time. We're all trying to ready ourselves for what's ahead, and the more we share what's working (and what's not), the better equipped we'll all be.

Let's keep the dialogue open and constructive. I'm happy to answer questions or hear what you're planning on your end.

I hate to jump on the bandwagon, but after the number of calls I've gotten from panicked closing agents, I figured this was a good time to share my take on the executive order everyone's buzzing about. Apologies in advance for the long post.

Yes, it's true that starting September 30, 2025, the executive order says tax payments to and from the IRS should be electronic. But unless I'm missing something, it doesn't say it has to be through EFTPS. It just says electronic. That leaves the door open for other methods like same-day wire payments or maybe even new systems the IRS will roll out between now and then. While EFTPS is the most common platform right now, it's not the only option.

According to the order, the Treasury Secretary is supposed to issue an implementation report by September 21, 2025, and then the rollout begins. Let's be honest though, given how government timelines tend to go, I'd be shocked if everything is fully in place, perfectly functioning, and strictly enforced by 12:01 AM on October 1st. It's not like the IRS is going to start shredding paper checks the moment that clock strikes midnight. There will almost certainly be a transition period.

Now let's talk about how FIRPTA withholding actually works from a tax reporting perspective. Withholding taxes, whether it's payroll, backup, or FIRPTA, are always credited to the withholding agent's TIN based on what's shown on the return. For FIRPTA, form 8288 is the buyer's tax return. So, the withholding will first be credited to the buyer's TIN. After that, the IRS allocates the withheld funds to the foreign sellers based on how the 8288-As are filled out.

Here's where things get messy. A traditional EFTPS account is linked to one taxpayer and one bank account. Since the buyer is the withholding agent, the IRS expects the payment to come from their EFTPS account tied to their TIN. That means the closing agent has to wire the FIRPTA funds from their escrow account into the buyer's personal bank account so the buyer can make the payment. There's no way around it. This creates obvious risks, and of course, only works if the buyer has a TIN in the first place.

Now, if your company already has an EFTPS account and you're planning to use it to pay the FIRPTA tax, that creates its own set of issues. Since EFTPS accounts are tied to a single taxpayer and bank account, any payment made through your company's EFTPS will be linked to your company's TIN. That means the IRS will see your company as the withholding agent. Meanwhile, the FIRPTA forms (if done correctly) will show the buyer's name and TIN. So, you end up with a tax return (Form 8288) filed under the buyer's TIN, but the payment credited to your company's TIN. This mismatch is exactly what triggers those "payment due" notices you've probably seen, which can lead to penalties for the buyer and delays in the seller's refund.

So, what's the plan? Tax professionals use EFTPS batch provider software that lets them make payments for multiple clients under one login. To my knowledge, it's not available to non-tax professionals yet, but maybe that's one of the changes we'll see moving forward. 

It's also worth noting that electronic FIRPTA payments aren't new, they've always been an option. Take the same day wiring option for example. This wiring method allows you, the closing agent, to make a payment on behalf of another taxpayer, which means you can correctly list the buyer as the taxpayer and enter the accounting period (which is the closing month and year, not just the tax year like we're used to for domestic filings). As you can imagine, one small input error can throw everything off. Here's a link to the worksheet if you're curious: SAME DAY WIRE

At Total FIRPTA, we're exploring a setup where we receive the FIRPTA funds directly into our "escrow" account (which feels a lot safer than wiring money to the buyer) and then submit the payment electronically using our batch provider access. Since FIRPTA forms still need to be mailed separately, we'll handle that part too if needed. We're already doing this with escrow checks and money orders, so it should be a smooth transition. I imagine we'll use an escrow agreement and charge a small fee like usual. We're testing the process now so we're ready when (and if) it becomes mandatory. We work nationwide, so I'd love your feedback on how this strategy might work (or not work) in your state.

My hope in sharing these thoughts is to bring a bit more clarity to an issue that's causing real concern. I don't claim to have all the answers-none of us do-but I've spent enough time in the FIRPTA trenches to know that thoughtful preparation beats panic every time. We're all trying to ready ourselves for what's ahead, and the more we share what's working (and what's not), the better equipped we'll all be.

Let's keep the dialogue open and constructive. I'm happy to answer questions or hear what you're planning on your end.

After all the hype, the IRS finally came out with new guidance today regarding electronic payments for FIRPTA, and it seems we are spared for now. 

According to the article, the IRS instructs taxpayers to continue with current payment methods until further notice.

You can read the article here: https://www.irs.gov/newsroom/irs-to-phase-out-paper-tax-refund-checks-starting-with-individual-taxpayers

I do believe we will move towards electronic payments in the future, but for the moment, we can all take a sigh of relief. 

P.s. @Mary Enzi - I'll see you at FLTA! 💙

I hate to jump on the bandwagon, but after the number of calls I've gotten from panicked closing agents, I figured this was a good time to share my take on the executive order everyone's buzzing about. Apologies in advance for the long post.

Yes, it's true that starting September 30, 2025, the executive order says tax payments to and from the IRS should be electronic. But unless I'm missing something, it doesn't say it has to be through EFTPS. It just says electronic. That leaves the door open for other methods like same-day wire payments or maybe even new systems the IRS will roll out between now and then. While EFTPS is the most common platform right now, it's not the only option.

According to the order, the Treasury Secretary is supposed to issue an implementation report by September 21, 2025, and then the rollout begins. Let's be honest though, given how government timelines tend to go, I'd be shocked if everything is fully in place, perfectly functioning, and strictly enforced by 12:01 AM on October 1st. It's not like the IRS is going to start shredding paper checks the moment that clock strikes midnight. There will almost certainly be a transition period.

Now let's talk about how FIRPTA withholding actually works from a tax reporting perspective. Withholding taxes, whether it's payroll, backup, or FIRPTA, are always credited to the withholding agent's TIN based on what's shown on the return. For FIRPTA, form 8288 is the buyer's tax return. So, the withholding will first be credited to the buyer's TIN. After that, the IRS allocates the withheld funds to the foreign sellers based on how the 8288-As are filled out.

Here's where things get messy. A traditional EFTPS account is linked to one taxpayer and one bank account. Since the buyer is the withholding agent, the IRS expects the payment to come from their EFTPS account tied to their TIN. That means the closing agent has to wire the FIRPTA funds from their escrow account into the buyer's personal bank account so the buyer can make the payment. There's no way around it. This creates obvious risks, and of course, only works if the buyer has a TIN in the first place.

Now, if your company already has an EFTPS account and you're planning to use it to pay the FIRPTA tax, that creates its own set of issues. Since EFTPS accounts are tied to a single taxpayer and bank account, any payment made through your company's EFTPS will be linked to your company's TIN. That means the IRS will see your company as the withholding agent. Meanwhile, the FIRPTA forms (if done correctly) will show the buyer's name and TIN. So, you end up with a tax return (Form 8288) filed under the buyer's TIN, but the payment credited to your company's TIN. This mismatch is exactly what triggers those "payment due" notices you've probably seen, which can lead to penalties for the buyer and delays in the seller's refund.

So, what's the plan? Tax professionals use EFTPS batch provider software that lets them make payments for multiple clients under one login. To my knowledge, it's not available to non-tax professionals yet, but maybe that's one of the changes we'll see moving forward. 

It's also worth noting that electronic FIRPTA payments aren't new, they've always been an option. Take the same day wiring option for example. This wiring method allows you, the closing agent, to make a payment on behalf of another taxpayer, which means you can correctly list the buyer as the taxpayer and enter the accounting period (which is the closing month and year, not just the tax year like we're used to for domestic filings). As you can imagine, one small input error can throw everything off. Here's a link to the worksheet if you're curious: SAME DAY WIRE

At Total FIRPTA, we're exploring a setup where we receive the FIRPTA funds directly into our "escrow" account (which feels a lot safer than wiring money to the buyer) and then submit the payment electronically using our batch provider access. Since FIRPTA forms still need to be mailed separately, we'll handle that part too if needed. We're already doing this with escrow checks and money orders, so it should be a smooth transition. I imagine we'll use an escrow agreement and charge a small fee like usual. We're testing the process now so we're ready when (and if) it becomes mandatory. We work nationwide, so I'd love your feedback on how this strategy might work (or not work) in your state.

My hope in sharing these thoughts is to bring a bit more clarity to an issue that's causing real concern. I don't claim to have all the answers-none of us do-but I've spent enough time in the FIRPTA trenches to know that thoughtful preparation beats panic every time. We're all trying to ready ourselves for what's ahead, and the more we share what's working (and what's not), the better equipped we'll all be.

Let's keep the dialogue open and constructive. I'm happy to answer questions or hear what you're planning on your end.

I hate to jump on the bandwagon, but after the number of calls I've gotten from panicked closing agents, I figured this was a good time to share my take on the executive order everyone's buzzing about. Apologies in advance for the long post.

Yes, it's true that starting September 30, 2025, the executive order says tax payments to and from the IRS should be electronic. But unless I'm missing something, it doesn't say it has to be through EFTPS. It just says electronic. That leaves the door open for other methods like same-day wire payments or maybe even new systems the IRS will roll out between now and then. While EFTPS is the most common platform right now, it's not the only option.

According to the order, the Treasury Secretary is supposed to issue an implementation report by September 21, 2025, and then the rollout begins. Let's be honest though, given how government timelines tend to go, I'd be shocked if everything is fully in place, perfectly functioning, and strictly enforced by 12:01 AM on October 1st. It's not like the IRS is going to start shredding paper checks the moment that clock strikes midnight. There will almost certainly be a transition period.

Now let's talk about how FIRPTA withholding actually works from a tax reporting perspective. Withholding taxes, whether it's payroll, backup, or FIRPTA, are always credited to the withholding agent's TIN based on what's shown on the return. For FIRPTA, form 8288 is the buyer's tax return. So, the withholding will first be credited to the buyer's TIN. After that, the IRS allocates the withheld funds to the foreign sellers based on how the 8288-As are filled out.

Here's where things get messy. A traditional EFTPS account is linked to one taxpayer and one bank account. Since the buyer is the withholding agent, the IRS expects the payment to come from their EFTPS account tied to their TIN. That means the closing agent has to wire the FIRPTA funds from their escrow account into the buyer's personal bank account so the buyer can make the payment. There's no way around it. This creates obvious risks, and of course, only works if the buyer has a TIN in the first place.

Now, if your company already has an EFTPS account and you're planning to use it to pay the FIRPTA tax, that creates its own set of issues. Since EFTPS accounts are tied to a single taxpayer and bank account, any payment made through your company's EFTPS will be linked to your company's TIN. That means the IRS will see your company as the withholding agent. Meanwhile, the FIRPTA forms (if done correctly) will show the buyer's name and TIN. So, you end up with a tax return (Form 8288) filed under the buyer's TIN, but the payment credited to your company's TIN. This mismatch is exactly what triggers those "payment due" notices you've probably seen, which can lead to penalties for the buyer and delays in the seller's refund.

So, what's the plan? Tax professionals use EFTPS batch provider software that lets them make payments for multiple clients under one login. To my knowledge, it's not available to non-tax professionals yet, but maybe that's one of the changes we'll see moving forward. 

It's also worth noting that electronic FIRPTA payments aren't new, they've always been an option. Take the same day wiring option for example. This wiring method allows you, the closing agent, to make a payment on behalf of another taxpayer, which means you can correctly list the buyer as the taxpayer and enter the accounting period (which is the closing month and year, not just the tax year like we're used to for domestic filings). As you can imagine, one small input error can throw everything off. Here's a link to the worksheet if you're curious: SAME DAY WIRE

At Total FIRPTA, we're exploring a setup where we receive the FIRPTA funds directly into our "escrow" account (which feels a lot safer than wiring money to the buyer) and then submit the payment electronically using our batch provider access. Since FIRPTA forms still need to be mailed separately, we'll handle that part too if needed. We're already doing this with escrow checks and money orders, so it should be a smooth transition. I imagine we'll use an escrow agreement and charge a small fee like usual. We're testing the process now so we're ready when (and if) it becomes mandatory. We work nationwide, so I'd love your feedback on how this strategy might work (or not work) in your state.

My hope in sharing these thoughts is to bring a bit more clarity to an issue that's causing real concern. I don't claim to have all the answers-none of us do-but I've spent enough time in the FIRPTA trenches to know that thoughtful preparation beats panic every time. We're all trying to ready ourselves for what's ahead, and the more we share what's working (and what's not), the better equipped we'll all be.

Let's keep the dialogue open and constructive. I'm happy to answer questions or hear what you're planning on your end.

Hello everyone, is there any updates in regards to remittances of the  Firpta withholding ? Deadline is around the corner. 

I hate to jump on the bandwagon, but after the number of calls I've gotten from panicked closing agents, I figured this was a good time to share my take on the executive order everyone's buzzing about. Apologies in advance for the long post.

Yes, it's true that starting September 30, 2025, the executive order says tax payments to and from the IRS should be electronic. But unless I'm missing something, it doesn't say it has to be through EFTPS. It just says electronic. That leaves the door open for other methods like same-day wire payments or maybe even new systems the IRS will roll out between now and then. While EFTPS is the most common platform right now, it's not the only option.

According to the order, the Treasury Secretary is supposed to issue an implementation report by September 21, 2025, and then the rollout begins. Let's be honest though, given how government timelines tend to go, I'd be shocked if everything is fully in place, perfectly functioning, and strictly enforced by 12:01 AM on October 1st. It's not like the IRS is going to start shredding paper checks the moment that clock strikes midnight. There will almost certainly be a transition period.

Now let's talk about how FIRPTA withholding actually works from a tax reporting perspective. Withholding taxes, whether it's payroll, backup, or FIRPTA, are always credited to the withholding agent's TIN based on what's shown on the return. For FIRPTA, form 8288 is the buyer's tax return. So, the withholding will first be credited to the buyer's TIN. After that, the IRS allocates the withheld funds to the foreign sellers based on how the 8288-As are filled out.

Here's where things get messy. A traditional EFTPS account is linked to one taxpayer and one bank account. Since the buyer is the withholding agent, the IRS expects the payment to come from their EFTPS account tied to their TIN. That means the closing agent has to wire the FIRPTA funds from their escrow account into the buyer's personal bank account so the buyer can make the payment. There's no way around it. This creates obvious risks, and of course, only works if the buyer has a TIN in the first place.

Now, if your company already has an EFTPS account and you're planning to use it to pay the FIRPTA tax, that creates its own set of issues. Since EFTPS accounts are tied to a single taxpayer and bank account, any payment made through your company's EFTPS will be linked to your company's TIN. That means the IRS will see your company as the withholding agent. Meanwhile, the FIRPTA forms (if done correctly) will show the buyer's name and TIN. So, you end up with a tax return (Form 8288) filed under the buyer's TIN, but the payment credited to your company's TIN. This mismatch is exactly what triggers those "payment due" notices you've probably seen, which can lead to penalties for the buyer and delays in the seller's refund.

So, what's the plan? Tax professionals use EFTPS batch provider software that lets them make payments for multiple clients under one login. To my knowledge, it's not available to non-tax professionals yet, but maybe that's one of the changes we'll see moving forward. 

It's also worth noting that electronic FIRPTA payments aren't new, they've always been an option. Take the same day wiring option for example. This wiring method allows you, the closing agent, to make a payment on behalf of another taxpayer, which means you can correctly list the buyer as the taxpayer and enter the accounting period (which is the closing month and year, not just the tax year like we're used to for domestic filings). As you can imagine, one small input error can throw everything off. Here's a link to the worksheet if you're curious: SAME DAY WIRE

At Total FIRPTA, we're exploring a setup where we receive the FIRPTA funds directly into our "escrow" account (which feels a lot safer than wiring money to the buyer) and then submit the payment electronically using our batch provider access. Since FIRPTA forms still need to be mailed separately, we'll handle that part too if needed. We're already doing this with escrow checks and money orders, so it should be a smooth transition. I imagine we'll use an escrow agreement and charge a small fee like usual. We're testing the process now so we're ready when (and if) it becomes mandatory. We work nationwide, so I'd love your feedback on how this strategy might work (or not work) in your state.

My hope in sharing these thoughts is to bring a bit more clarity to an issue that's causing real concern. I don't claim to have all the answers-none of us do-but I've spent enough time in the FIRPTA trenches to know that thoughtful preparation beats panic every time. We're all trying to ready ourselves for what's ahead, and the more we share what's working (and what's not), the better equipped we'll all be.

Let's keep the dialogue open and constructive. I'm happy to answer questions or hear what you're planning on your end.

Hi Judith,

The IRS has paused electronic FIRPTA payments until further notice. 

Hello everyone, is there any updates in regards to remittances of the  Firpta withholding ? Deadline is around the corner. 

I hate to jump on the bandwagon, but after the number of calls I've gotten from panicked closing agents, I figured this was a good time to share my take on the executive order everyone's buzzing about. Apologies in advance for the long post.

Yes, it's true that starting September 30, 2025, the executive order says tax payments to and from the IRS should be electronic. But unless I'm missing something, it doesn't say it has to be through EFTPS. It just says electronic. That leaves the door open for other methods like same-day wire payments or maybe even new systems the IRS will roll out between now and then. While EFTPS is the most common platform right now, it's not the only option.

According to the order, the Treasury Secretary is supposed to issue an implementation report by September 21, 2025, and then the rollout begins. Let's be honest though, given how government timelines tend to go, I'd be shocked if everything is fully in place, perfectly functioning, and strictly enforced by 12:01 AM on October 1st. It's not like the IRS is going to start shredding paper checks the moment that clock strikes midnight. There will almost certainly be a transition period.

Now let's talk about how FIRPTA withholding actually works from a tax reporting perspective. Withholding taxes, whether it's payroll, backup, or FIRPTA, are always credited to the withholding agent's TIN based on what's shown on the return. For FIRPTA, form 8288 is the buyer's tax return. So, the withholding will first be credited to the buyer's TIN. After that, the IRS allocates the withheld funds to the foreign sellers based on how the 8288-As are filled out.

Here's where things get messy. A traditional EFTPS account is linked to one taxpayer and one bank account. Since the buyer is the withholding agent, the IRS expects the payment to come from their EFTPS account tied to their TIN. That means the closing agent has to wire the FIRPTA funds from their escrow account into the buyer's personal bank account so the buyer can make the payment. There's no way around it. This creates obvious risks, and of course, only works if the buyer has a TIN in the first place.

Now, if your company already has an EFTPS account and you're planning to use it to pay the FIRPTA tax, that creates its own set of issues. Since EFTPS accounts are tied to a single taxpayer and bank account, any payment made through your company's EFTPS will be linked to your company's TIN. That means the IRS will see your company as the withholding agent. Meanwhile, the FIRPTA forms (if done correctly) will show the buyer's name and TIN. So, you end up with a tax return (Form 8288) filed under the buyer's TIN, but the payment credited to your company's TIN. This mismatch is exactly what triggers those "payment due" notices you've probably seen, which can lead to penalties for the buyer and delays in the seller's refund.

So, what's the plan? Tax professionals use EFTPS batch provider software that lets them make payments for multiple clients under one login. To my knowledge, it's not available to non-tax professionals yet, but maybe that's one of the changes we'll see moving forward. 

It's also worth noting that electronic FIRPTA payments aren't new, they've always been an option. Take the same day wiring option for example. This wiring method allows you, the closing agent, to make a payment on behalf of another taxpayer, which means you can correctly list the buyer as the taxpayer and enter the accounting period (which is the closing month and year, not just the tax year like we're used to for domestic filings). As you can imagine, one small input error can throw everything off. Here's a link to the worksheet if you're curious: SAME DAY WIRE

At Total FIRPTA, we're exploring a setup where we receive the FIRPTA funds directly into our "escrow" account (which feels a lot safer than wiring money to the buyer) and then submit the payment electronically using our batch provider access. Since FIRPTA forms still need to be mailed separately, we'll handle that part too if needed. We're already doing this with escrow checks and money orders, so it should be a smooth transition. I imagine we'll use an escrow agreement and charge a small fee like usual. We're testing the process now so we're ready when (and if) it becomes mandatory. We work nationwide, so I'd love your feedback on how this strategy might work (or not work) in your state.

My hope in sharing these thoughts is to bring a bit more clarity to an issue that's causing real concern. I don't claim to have all the answers-none of us do-but I've spent enough time in the FIRPTA trenches to know that thoughtful preparation beats panic every time. We're all trying to ready ourselves for what's ahead, and the more we share what's working (and what's not), the better equipped we'll all be.

Let's keep the dialogue open and constructive. I'm happy to answer questions or hear what you're planning on your end.