FIRPTA Tax Blog

September 17, 2022

外国投资者在美国售房后等了几年却一直不能从国税局拿回预扣税金怎么办？为什么外国售房者拿不回预扣税金？究竟要等多久才能拿回预扣税金？

作者: Michael W. Brooks (税务律师/DIRECTS董事长) 和 Angela Li, MBA

我们有很多外国投资者(或外国公司)在过去几年(例如2019年或2020年)在美国卖了房，但是一直拿不回预扣税金。外国投资者非常担忧，因为这笔预扣税的金额很高 (房屋卖价的15%对于任何人来说都是一笔巨款)。例如，一名外国投资者在2019年8月以140万美金卖了他的房产，在2019年8月21万美金的预扣税被交到国税局，这名外国投资者应该拿回绝大部分的预扣税(扣除盈利部分的税后)，可是直到2022年 8月这名外国投资者一分钱的退税都没有拿到。卖房后缴纳到国税局的预扣税21万美金已经等了3年还没有退回来，这是一个相当长的时间。我们把这种卖房几年后都拿不回预扣税金的案例称做 “SOS 退税”(紧急救援退税)。这种SOS退税的案例经常发生，为什么会发生呢，我们现在可以采取什么补救措施呢？

外国售房者在卖房后有提交美国报税并申请退税吗？
当我们在办理这种SOS退税的案例时第一步要看的是外国售房者有提交过美国报税吗？即使提交过美国的报税，是否是正确的符合国税局要求的税表？外国投资者可以在卖房后相当长的时间内提交报税并申请退税，但是有一定的时间限制。一般来说，为了合法申请退税，外国售房者必须在卖房后报税年度的3年内提交正确的报税。外国人在美国卖房后必须在次年的6月15日前提交报税。例如在2019年8月的售房，报税期限是2020年6月15日，最晚并能够合法申请退税的期限是2023年6月15日。这个例子中我们看到售房者仍然有时间来提交报税并申请退税(但是超过这个期限后就无法申请退税了)。最后需要注意，即使提交了报税，要确认国税局是否收到了报税。我们经常在帮助外国售房者联系国税局查询退税进度时，根据国税局办事人员的回复，他们从来没有收到过报税。这种情况下，必须立即再次提交报税以确保国税局在规定的有效期限内收到报税。

August 17, 2022

What About IRS Withholding Tax Refunds from Prior Year Sales Which You Just Can’t Get? What Are the Likely Reasons You Can’t Obtain the Refund? How Long Do You Have to Obtain the Refund?

by Michael Brooks

We have many foreign individuals (or foreign entities) who sold their US real estate in a prior year (say 2020 or 2019), and simply can’t obtain their refund. Hugely frustrating of course. And this refund is very often a large amount (15% of the gross sales price of a US real estate transaction is going to be a lot of bucks for almost anyone). Let’s say, for example, a non-US person sold US real estate in August 2019 for $1,400,000. So $210,000 went into the IRS in August 2019, and depending on the amount of profit the foreign seller made on the sale, the foreign individual is probably entitled to a large refund, and here we are in August 2022 and the individual hasn’t received a penny. Three years since the sale and the withholding tax of $210,000 being submitted into the IRS, and still no refund. That’s a long time. We call refunds which have not been obtained years after the original date of sale “SOS refunds”. Happens so frequently, but what caused it, and what to do now about the SOS refund?

Did the Foreign Seller File a US Tax Return to Claim the Refund?

The obvious first question in reviewing the SOS refund scenario is, has the foreign seller even filed a US tax return yet? Although it’s a really long timeframe, there is a limit on when the tax return must be filed in order for the person to be eligible to receive the refund. Generally, in order to be eligible for the tax refund, a tax return must be filed not later than three years from the date of the original deadline for the tax return. In the case of a non-US person selling US real estate, the tax return is due on June 15 of the year after the real estate transaction. So, in the case of our August 2019 sale, the original deadline was June 15, 2020, and the latest the non-US person can file a tax return and still be eligible for a tax refund is June 15, 2023. Even now in this hypothetical sale, the individual still has the better part of year to file the tax return to be eligible to obtain a refund (but after that, the refund will be time-barred). Final note here, be careful that if a tax return has been filed that the IRS actually acknowledges their receipt of such tax return. So often we call the IRS to check on the status of a refund and (according to the IRS agent) the IRS has simply never received the tax return. Yikes, better mail it right back in there to ensure no question that the tax return filed was timely.

January 20, 2022

Who Counts as a Foreign Seller (Subject to the 15% Withholding Tax) Anyway?

by Michael Brooks

Probably the trickiest area in the whole of FIRPTA is just who is a foreign seller to begin with. Foreign seller- 15% withholding tax gets sent into the IRS; US seller- no 15% goes into the IRS. Stakes are pretty high it seems….

First, remember it is the seller himself (or herself) who tells escrow (or title, or an attorney, depending on where in the US the sale is taking place) whether he or she is a foreign seller; it all starts with the seller and the seller’s declaration on the Certification of Nonforeign Status. It’s probably fair to assume the seller generally does not want to be considered a foreign seller (the seller does not want the 15% withheld and sent into the IRS at the time of closing). The seller probably wants to complete and sign the Certification of Nonforeign Status (and avoid the withholding), if that was proper. But completing the Certification of Nonforeign Status is not without its downside. Any person completing the Certification of Nonforeign Status is telling the IRS that they are a US person for tax purposes. US persons for tax purposes are legally required to complete their IRS 1040’s annually and on that IRS form 1040 they must declare their worldwide income (non-US persons for tax purposes need only file US income tax returns in any year in which they earn income in the US, plus they need only declare their US sourced income…big difference from having to inform the IRS as to your worldwide income in a given year). US persons for tax purposes are also required to annually disclose their non-US bank accounts (if they have any) via their annual FBAR (Report of Foreign Bank Accounts) filing, and if they don’t do that the IRS can impose heavy penalties. Non-US persons for tax purposes have no annual FBAR obligation. So it’s probably safe to say that, except for the required 15% withholding tax at closing on a real estate transaction, most persons would prefer to be considered a non-US tax person, and not a US tax person for tax purposes. So completing the Certification of Nonforeign Status is a big deal, and comes with a significant potential downside for those who are simply trying to avoid sending in the withholding tax to the IRS.

And what about the various components of the Certification of Nonforeign Status, what is the significance of the key components?

January 4, 2022

HOW DID THE IRS DO FOR THE REMAINDER OF 2021 GIVEN THIS CORONAVIRUS CRISIS? HOW ARE THEY DOING NOW?

by Michael Brooks

By: Michael W. Brooks, Esq.

And it drags on… this Coronavirus. And the Coronavirus continues to be a drag on the departments and services provided by the United States government. The government and services of the State of California continue to have major difficulties as well. Plus, we hear stories form our clients around the world on how backed up government services and departments continue to be in their home country. So it’s not just us in the United States having all the trouble, if that makes us feel better. It’s everywhere. Fine, but how are the government services doing which we at DIRECTS (Domestic and International Real Estate Closing Tax Services) must concern ourselves with? Specifically, how are the IRS and FTB doing in their vital roles relating to real estate transactions (and of course we at DIRECTS really care about real estate transactions entered into by non-US persons/ entities)? It’s still a slog. Let’s take a look.

8288-B/ Withholding Certificate Applications

January 27, 2021

OK, SO HOW DID THE IRS DO FOR THE REMAINDER OF 2020 GIVEN THIS CORONAVIRUS CRISIS? HOW ARE THEY DOING NOW?

by Michael Brooks

By: Michael W. Brooks, Esq.

Earlier posts informed you that IRS employees in offices throughout the United States left their offices in April 2020, and only came back to work in July. We can now give you an update on where the IRS is at processing tax returns, 8288-B withholding certificate applications and ITIN applications. In general, the news is that the IRS came back to work in July 2020 (with a four-month backlog of work waiting for them), but many of those returning IRS employees are now working from home. In general, they have gone through the backlog pretty well (probably as well as can be expected in many instances), but problems still remain. Below we give you an overview of where we’re are at at DIRECTS in terms of the IRS processing the work of our 2019/ 2020 clients. First, an update on the current state of affairs at the IRS, from our view…

The Biggest Problems Now at the IRS is that They Are Not Cashing All the Withholding Tax Checks

October 5, 2020

由于新冠病毒的持续扩散，国税局办理外国投资者的退税，税号和预扣税快速退还申请面临着进一步的延误（第二部分）

by Michael Brooks

作者: Michael W. Brooks (税务律师/DIRECTS董事长) 和 Angela Li, MBA

michael@directsllp.com

2.国税局有几个月没有批复任何税号了，但是7月底，国税局终于开始批复税号申请。

August 24, 2020

由于新冠病毒的持续扩散，国税局办理外国房地产投资者的退税，税号和预扣税快速退还申请面临着进一步的延误（第一部分）

by Michael Brooks

作者: Michael W. Brooks (税务律师/DIRECTS董事长) 和 Angela Li, MBA

michael@directsllp.com

根据我们今年早些时间的博客，我们通知了外国房地产投资者由于美国新冠病毒爆发的原因，国税局员工在3月底离开了他们的办公室并停止了审阅任何外国人提交的纸质报税和美国人提交的纸质报税。现在的问题是，至今4个多月过去了，国税局的员工回到他们的办公室并开始他们的工作了吗？根据我们最新的信息，外国房地产投资者的退税面临着越来越大的问题。第一，我们怎么确定国税局只是4个多月没有工作呢？我们公司DIRECTS (国内/国际房地产交易税务服务公司)为外国房地产投资者准备卖房时的所有税务文件。我们帮助外国售房者申请ITIN’s (美国纳税人身份号)，这个税号是必须申请的，如果外国售房者想要拿回售房时国税局征收的按照房屋售价15%的预扣税。我们帮助外国房地产投资者申请退还15%联邦预扣税-通过在售房时提交的8288-B预扣税快速退还申请或在售房后的次年为外国售房者提交报税并退还15%联邦预扣税和3.33%的加州预扣税。通过为现有的一千多名外国客户办理各种税务申请，我们几乎每天都会收到国税局的各种信件。然而，自2020年4月到2020年7月底，我们公司(DIRECTS) 位于加州Arcadia, Irvine和Palm Desert的3个办公室没有收到过任何国税局的信件。直至2020年8月初，我们终于开始收到国税局的信件了(意味着国税局员工真正回到办公室了)。

July 21, 2020

Virus Continues to Delay IRS Processing Of Foreign Investor Tax Returns/Refunds, ITIN’s and Withholding Certificates (Part 2)

by Michael Brooks

By Michael W. Brooks, Esq.

michael@directsllp.com

The IRS Had Not Been Issuing ITIN’s for Months, But Just Now, in Late July 2020, the IRS Has Finally Resumed Issuing ITIN’s

July 12, 2020

Virus Continues to Delay IRS Processing Of Foreign Investor Tax Returns/Refunds, ITIN’s and Withholding Certificates (Part 1)

by Michael Brooks

By Michael W. Brooks, Esq.

michael@directsllp.com

Following up on our previous posts earlier this year, where we informed you the IRS employees in offices throughout the United States left those offices in late March, due to concerns about the virus (and stopped processing any foreign seller tax returns and paper tax returns for US taxpayers as well), we can tell you three and one-half months later that the IRS employees who process foreign seller issues and paper tax return refunds have still not returned to their offices to continue this work. While there have been numerous news reports about the IRS employees returning to their offices in June (and those reports were true in terms of answering phone calls and general operations), in terms of processing any paper tax returns (and issuing any refunds associated with such returns) and performing any function for foreign sellers of US real estate (we’ll go over those below), the IRS has not returned to work, and there appears to be no end in sight as to when they will actually return to their jobs (although just on July 7 we did receive an email from the IRS about the resumption of ITIN services). Detailed below is what we know, and at the end our thoughts on how realtors and escrow officers should address this big (and growing bigger) problem.

May 27, 2020

外国房地产投资者的退税现在几乎确定将被延误因为国税局员工拒绝复工的”要求”

by Michael Brooks

作者: Michael W. Brooks (税务律师/DIRECTS 董事长)

Angela Li (DIRECTS国际税务部经理)

即使几个星期前国税局 “要求” 超过一万名员工回去工作，但是很多国税局员工仍然不愿意回去。4月27日，国税局要求他们执行 “关键任务 “的员工复工。这个要求距离之前国税局要求他们的员工离开办公室有一个月。3月底，为了防止新冠病毒的传播，国税局让全国大约七万五千名员工回到家中。大约四万四千名在家中工作，而大约三万名仍然继续领工资但是不用工作。4月27日，国税局甚至以奖励津贴的方式吸引员工回来办公室，但是这个小额的奖励津贴作用不大，许多国税局员工仍然拒绝回到办公室。由于国税局不能保证每个办公室都能提供口罩((有一些办公室可以)，员工在当前疫情严重的情况下担心着自己的安全。