Our office has received a significant number of inquiries regarding this topic, and we want to assure you that we are actively working on a comprehensive solution. We're taking the time to carefully evaluate all the moving parts so that you don't have to.
At this point, we have submitted a proposed plan to the IRS for acknowledgment. Until we receive that acknowledgment, we're unable to release the full details. We recognize the complexity of this issue, particularly when it comes to the various types of FIRPTA payers involved; individuals (with or without ITINs), corporations, trusts, disregarded entities, and others. Each of these adds a layer to the overall solution.
We understand the urgency and the need for clear guidance. However, each proposed solution comes with its own unique challenges. Our goal is to provide a well-vetted, practical approach that works across these scenarios. We anticipate being able to share the full details with you by September 1, 2025.
Please note: nothing new will go into effect until September 30, 2025. In the meantime, continue using your current process or reach out to us directly if you're unsure how to proceed with a specific file, we're here to help.
Thank you for your patience and collaboration.
Original Message:
Sent: 07-25-2025 15:09
From: David Shean
Subject: Challenges Foreign Sellers Face With EFTPS Enrollment and Use
Hi Kat:
As you are aware, settlement practices are different in WET (Table) Closing vs. DRY (Settlement) Closing States.
As a DRY Settlement Closing Agent, we collect and disburse all pertinent documents and funds at the "close of escrow" once recordation and contingent commitments has occurred. At the "closing" the Settlement Agent then disburses all funds including any FIRPTA required payments from the Settlement Agent's Trust Account included with Transferor and Transferee appropriately completed and signed IRS Form(s) 8288, 8288-A (Copy A and B).
So, as I understand the "new process" the Independent Settlement Agent Licensee or Broker Owned Settlement Agent or Title Entity Settlement Agent will be submitting FIRPTA funds via EFTPS system. In this scenario the Buyer/Transferee will actually NOT be transferring funds.
Questions:
1. Will the EFTPS system allow for input of Transferor and Transferee information separate from the actual remitter (Settlement Agent) of the funds;
2. Will the IRS Forms be able to be uploaded with the new payment system;
3. How will the forms, if mailed separately, be accurately matched to the funds transmitted;
4. Will the Settlement Agent need to create separate EFTPS accounts for each FIRPTA payment;
5. The list goes on?
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David Shean
Escrow Administrator/Consultant/Owner
Escrow Essentials
Pasadena CA
Original Message:
Sent: 07-15-2025 13:41
From: Kat Rodgers
Subject: Challenges Foreign Sellers Face With EFTPS Enrollment and Use
As you're aware, the new IRS mandate requiring all FIRPTA withholding payments to be made electronically through the Electronic Federal Tax Payment System (EFTPS) takes effect on September 30, 2025-and the IRS is already falling behind.
This change introduces significant challenges for many foreign sellers and buyers involved in U.S. real estate transactions.
Setting up an EFTPS account is not straightforward: it requires a valid U.S. Taxpayer Identification Number (TIN), a U.S. mailing address, and up to 10+ business days to receive a PIN by postal mail. However, PIN delivery has been consistently delayed-even to U.S. addresses. Without the PIN, account activation can't be completed, and failure to pay within the IRS's 20-day FIRPTA deadline can trigger automatic penalties and interest.
Foreign sellers, often unfamiliar with U.S. tax systems, face further complications. The EFTPS platform is not designed for real estate transactions, and there is little guidance available for navigating it. Critically, buyers and sellers remain fully liable for penalties-even if a closing agent assists.
Key Challenges:
1. PIN Delays Are Already Happening
Although the IRS states 5–10 business days for delivery, PINs often don't arrive at all within that window-even at U.S. addresses. This delays EFTPS access and risks FIRPTA non-compliance.
2. U.S. Mailing Address Requirement
Foreign sellers without a U.S. address must rely on attorneys, agents, or relatives to receive the PIN-introducing risk and logistical complexity.
3. Complex Enrollment Process
The EFTPS system requires knowledge of U.S. tax forms and identity verification steps that many foreign users are unfamiliar with.
4. Tight IRS Deadline With No Flexibility
FIRPTA payments must be made electronically within 20 days of closing. Without an active EFTPS account, sellers (or buyers on their behalf) may face immediate penalties.
5. Limited IRS Support for International Users
Support for PIN issues, address changes, or delayed delivery is minimal and often not responsive for non-U.S. participants.
6. Language and Navigation Barriers
The EFTPS platform is not intuitive for international users, especially non-native English speakers or those without prior IRS experience.
✅ What We're Doing to Help
We are currently working on a new format to simplify how FIRPTA-related IRS payments can be made under the upcoming electronic-only requirement.
Our goal is to make this process clearer, faster, and more manageable for everyone involved-especially foreign sellers and real estate professionals.
Our solution will be in place and ready no later than September 1, 2025, well ahead of the IRS enforcement deadline on September 30.
FIRPTA is changing-our job is to make it easier for everyone.
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Kat Rodgers
Foreign Tax CPA, LLC
Cocoa Beach FL
+1 (321) 784-8329
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