At T. W. Lewis & Co. we have handled FIRPTA compliance and clean-up matters regularly for over a decade.
FIRPTA Sample Matters
TYPES OF CASES:
- Tax returns to remit the Federal withholding due based on the sale price or a FIRPTA withholding certificate
- New York State estimated income tax returns Forms IT-2663 and IT-2664 for sales of real property and co-operative apartments
- Applications for a FIRPTA withholding certificate to reduce the Federal withholding amount from the default 15% of sale price amount
- Applications for an early refund of some or all of the FIRPTA withholding already remitted from a completed transaction
- Application for a foreign governments of six countries over time to not be subject to FIRPTA withholding on the sale of a Manhattan consular residence, mission or other US real property interest
- Addressing failure to withhold or remit the required amounts for completed transactions in which the parties were unaware of FIRPTA or their prior advisers incorrectly prepared or filed FIRPTA filings
- Addressing the need for evidence to confirm that a seller is not a “foreign person” subject to FIRPTA withholding
- Filing any previously unfiled Federal, State and City income tax returns for prior years with rental activities to qualify for a FIRPTA Withholding Certificate
- Filing income tax returns for the year of the sale of the US Real Property Interest to claim proper credit for the FIRPTA monies remitted
- Addressing situations where FIRPTA withholding does not apply, but the parties sent in the FIRPTA withholding tax to the IRS anyway, or when FIRPTA withholding tax is credited to the wrong taxpayer
- Filing of “trace requests” to have FIRPTA withholding moved from the transaction-specific account to the seller’s SSN, EIN or ITIN, which is very common at the moment due to IRS dysfunction arising from Covid-19 shutdown and loss of its workforce in the Ogden FIRPTA and Austin ITIN Operations groups
CASES HANDLED:
- We represented the buyer of a parcel of real estate in Manhattan owned by the Republic of Denmark and held 15% of the sale price in escrow until IRS action upon the application for a withholding certificate by the Republic of Denmark
- We obtained FIRPTA withholding certificates twice to establish exempt status for the 5 successor countries to Yugoslavia for their sale of two properties in Manhattan
- We obtained abatement of erroneous penalty and interest of over $300,000 imposed on a buyer who timely remitted $945,000 of FIRPTA escrow funds to the IRS “early” while the seller’s application for a FIRPTA withholding certificate was still pending before the IRS
- We obtained abatement of penalty and interest for a late FIRPTA remittance of 15% of the sale price placed in a “blue box” operated by the United States Postal Service on time but never received by the IRS
- We represented a law firm erroneously billed for the full FIRPTA amount due for a transaction with an IRS Federal Tax Lien imposed, when the proper party who timely submitted payment of the FIRPTA amount due was an LLC client of the law firm that purchased the property from the foreign seller in the transaction