With the ongoing federal government shutdown, many people have been asking how FIRPTA processes are being impacted.
Here's what's actually happening based on the IRS shutdown procedures:
ITIN Processing (Form W-7) Is Paused
During a shutdown, ITIN Operations are closed.
• Applications submitted by mail or through IRS centers are not being processed.
• No ITINs are being issued until the IRS reopens.
FIRPTA Withholding Returns (Forms 8288 & 8288-A) Are Not Being Processed
The IRS still receives mail, but:
• Forms 8288 and 8288-A sit in queue.
• Stamped copies of Form 8288-A for transferors are not being mailed out during the shutdown.
Withholding Certificates (Form 8288-B) Are on Hold
This is one of the biggest bottlenecks.
• The IRS does not review, approve, or issue any withholding certificates during a shutdown.
• Pending requests are frozen.
• New requests are accepted but won't move forward until funding is restored.
This can directly affect closings that depend on a reduced FIRPTA withholding rate.
Refunds Are Delayed
Any FIRPTA-related refund, including those tied to Form 8288-B, Form 1040-NR, or Form 1120-F, is not issued until normal IRS operations resume.
IRS Support Lines Are Closed
• Practitioner Priority Service
• International Taxpayer Assistance
• General IRS phone lines
All are offline during a shutdown.
Deadlines Still Apply, and Penalties for Late Payments Are Enforced
Even though IRS processing is on hold, FIRPTA deadlines still apply. This means that, despite the shutdown, the statutory withholding rates and deadlines for submitting forms are still in place.
• Penalties for the late receipt of funds or failure to meet filing deadlines will still be enforced once the government reopens.
• It's important to ensure that any required payments or filings are made on time to avoid potential penalties, even though the IRS may not be processing them during the shutdown.
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Kat Rodgers
Foreign Tax CPA, LLC
Cocoa Beach FL
+1 (321) 784-8329
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