FIRPTA Compliance & Representation for Foreign Nationals

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Protecting Foreign Sellers and U.S. Real Estate Transactions From Costly IRS Issues

Selling U.S. property as a foreign national involves strict federal tax rules under the Foreign Investment in Real Property Tax Act (FIRPTA). In Florida — where many closings involve foreign sellers and buyers — withholding mistakes can delay a transaction or expose parties to IRS penalties.

At Willis & Davidow, we guide clients through the FIRPTA process to ensure your Florida real estate transaction moves forward smoothly, lawfully, and without unnecessary financial surprises.

Why FIRPTA Matters for Foreign Nationals Selling Property in Florida

Why FIRPTA Matters for Foreign Nationals Selling Property in Florida

FIRPTA is federal law, which means its rules apply nationwide, including Florida. But the way transactions are handled in Florida — especially through title companies and escrow agents — adds practical considerations foreign sellers must understand.

Without proper guidance, clients may face:

  • Withholding of 15% of the sale price
  • Delays in closing due to missing or incorrect forms
  • IRS penalties for late or incomplete filings
  • Difficulty retrieving withheld funds
  • Miscommunication between buyers, agents, and title professionals

We help foreign sellers comply with federal FIRPTA requirements while navigating the unique way closings are conducted in Florida.

WHAT WE DO

Our FIRPTA Compliance & Representation Services

Withholding Certificate Guidance (Form 8288-B)

Foreign sellers may qualify for reduced or zero withholding, but only with timely submission of a withholding certificate request. We prepare and file these applications, helping prevent excessive withholding at closing.

Exemption & Exception Review

Not every sale requires FIRPTA withholding. We evaluate whether you may qualify for:

  • The personal residence exception
  • Non-recognition transactions
  • Treaty-based relief (when applicable)
  • Proper non-foreign certifications (for certain entities and structures)
  • A careful review can prevent unnecessary withholding and reduce the risk of IRS scrutiny.

IRS Filings & Compliance Management

FIRPTA filings must follow strict federal timelines. We assist with:

  • Forms 8288 and 8288-A
  • Withholding certificate submissions
  • Supporting documentation
  • Follow-up with the IRS when needed

We ensure your obligations are met accurately and on time.

Coordination With Florida Title Companies, Agents & Escrow

Florida closings are typically handled by title companies, which play a significant role in FIRPTA procedures. We work directly with:

  • Title and escrow agents
  • Real estate agents
  • Buyers’ representatives
  • Tax advisors (as needed)

Our role is to help ensure that all parties understand their responsibilities and that withholding is handled correctly on closing day.

Help Resolving IRS Delays & Issues

If the IRS delays or questions your filing, we assist with:

  • Correcting missing or inaccurate information
  • Responding to supplemental documentation requests
  • Re-submitting applications if necessary

We work to reduce delays in releasing funds or processing IRS responses.

Important Context for Florida Sellers

Because FIRPTA is a federal law:

  • Florida does not impose an additional state-level withholding requirement
  • Florida has no personal state income tax, which means no separate state tax filing related to FIRPTA
  • Florida documentary stamp tax still applies, but is separate from FIRPTA obligations
  • FIRPTA applies even when the property is residential, vacation, or investment property located in Florida

Understanding the difference between Florida transaction costs and federal FIRPTA requirements helps prevent confusion during closing.

Important Context for Florida Sellers
FIRPTA Compliance & Representation Services

Who We Serve

  • Foreign individuals selling residential or investment property in Florida
  • International investors restructuring or exiting U.S. real estate assets
  • Buyers who want to ensure compliance with withholding obligations
  • Florida real estate professionals representing foreign clients
  • Foreign entities — including corporations, partnerships, and trusts — involved in property transfers

Why Foreign Clients Trust Willis & Davidow

Clear, Practical Guidance

We simplify complex rules and explain FIRPTA obligations in plain language — so you always know what to expect.

Experience With Florida Transactions

We understand how FIRPTA interacts with Florida’s closing practices, including title company procedures and escrow requirements.

Collaborative Team Approach

We coordinate with accountants, tax advisors, and foreign counsel when appropriate. Willis & Davidow does not prepare tax returns, but we work closely with your tax professionals.

Protection at Every Step

From contract review to closing, we help prevent costly errors and protect your interests throughout the process.

Why Foreign Clients Trust Willis & Davidow
CONTACT US

Contact Our FIRPTA Compliance Attorneys

When contracts break down or business conflicts arise, you don’t have to face them alone.

Willis & Davidow ensures your rights and finances are protected — because we know the other side is working just as hard to protect theirs.

FAQs: FIRPTA Compliance for Foreign Sellers in Florida

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Does FIRPTA apply even though Florida has no state income tax?

Yes. FIRPTA is a federal withholding law, and it applies in every real estate sale where the seller is a “foreign person,” regardless of state tax systems. Florida’s lack of state income tax does not eliminate or reduce FIRPTA obligations. Even if the property is exempt from Florida income tax, the federal requirement to withhold and remit funds to the IRS still applies.

For foreign sellers, this means that any sale of U.S. real property located in Florida may trigger FIRPTA withholding, unless a valid exception or reduced-withholding certificate applies.

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Is FIRPTA the same as Florida’s documentary stamp tax?

No. These two concepts are completely separate. Documentary stamp tax (“doc stamps”) is a Florida-specific transfer tax imposed on the sale of real property. It is unrelated to the seller’s tax status and does not depend on whether the seller is a U.S. or foreign person. FIRPTA, on the other hand, is a federal withholding requirement designed to ensure foreign sellers pay any federal tax owed on the sale of U.S. property. Doc stamps are usually paid by the seller in Florida transactions, while FIRPTA funds are withheld by the buyer and remitted to the IRS.

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How long does it take the IRS to process a withholding certificate?

The IRS generally takes 90–120 days to process a properly submitted FIRPTA withholding certificate (Form 8288-B). However, actual processing times can vary due to: Volume of applications, requests for additional documentation, IRS staffing fluctuations and incomplete or inconsistent information. Submitting the application as early as possible — ideally before closing — helps prevent funds from being held longer than necessary. If the IRS requires clarification or supplemental information, it can extend the timeline. Willis & Davidow assists with preparing accurate submissions to minimize potential delays.

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Can the buyer be penalized if FIRPTA is handled incorrectly?

Yes. Under federal law, the buyer is ultimately responsible for ensuring FIRPTA withholding is completed correctly. If the buyer fails to withhold and transfer the required amount — even due to misunderstanding or incorrect information — the IRS may hold the buyer directly liable for the full withholding amount, plus potential penalties and interest. This is why many Florida buyers choose to involve legal counsel, especially when the seller is not a U.S. person. Proper withholding protects both sides of the transaction and keeps the closing compliant.

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Does Willis & Davidow prepare tax returns?

No. Willis & Davidow provides legal guidance related to FIRPTA compliance, withholding requirements, and transaction structure. We do not prepare federal or state tax returns. However, many foreign sellers require a tax return to request a refund or report the sale. We regularly coordinate with CPAs, tax advisors, international accountants and financial professionals. This ensures the legal and tax aspects of the transaction align without overstepping professional boundaries.

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