Sirius Tax Group LLC

CLIENT SUCCESS STORY. ITIN & FIRPTA.

One of our clients had a time-sensitive need for receiving a refund in conjunction with a FIRPTA transaction from a previous year. As the time frame to receive a refund was quickly approaching, it was critical that our client apply for and receive an ITIN as soon as possible before the tax deadline of April 15, 2026.

We coordinated with our client to apply for the ITIN, receive the paperwork via international courier, and then submit the
W-7 application to the ITIN unit in Austin, Texas.

This was a sizeable refund and our client, a Middle Eastern foreign national, is extremely pleased that his application was approaching and that a refund is forthcoming.

As a reminder, FIRPTA requires withholding when foreign persons sell U.S. real property interests. The standard rate is 15% of gross sales price, though rates vary based on property type and sale price:

• Residential property ≤$300,000: No withholding (if buyer occupies as primary residence for 50%+ of first two years)
• Residential property ≤$1,000,000: 10% withholding (if buyer intends primary residence use)
• Property >$1,000,000 or investment property: 15% withholding

At Sirius Tax Group, we've successfully guided foreign nationals through FIRPTA compliance and ITIN applications for property sales. Recent clients from Asia and the Middle East both obtained ITINs and are receiving their withholding refunds—a testament to comprehensive, culturally sensitive advisory.

If you're a foreign national seeking assistance with applying for an ITIN for a FIRPTA transaction or other tax need, please don't hesitate to reach out to us.

FIRPTA Compliance for Foreign Property Sales: A Tax Professional's Guide

As tax professionals, real estate attorneys, and advisors, understanding FIRPTA (Foreign Investment in Real Property Tax Act) is essential for serving international clients and protecting your practice.

**The Fundamentals:**
FIRPTA requires withholding when foreign persons sell U.S. real property interests. The standard rate is 15% of gross sales price, though rates vary based on property type and sale price:

• Residential property ≤$300,000: No withholding (if buyer occupies as primary residence for 50%+ of first two years)
• Residential property ≤$1,000,000: 10% withholding (if buyer intends primary residence use)
• Property >$1,000,000 or investment property: 15% withholding

**Critical Compliance Steps:**
The withholding agent (typically the buyer or closing agent) must file Form 8288 within 20 days of transfer. Form 8288-A must be prepared for each foreign seller and serves as proof of withholding for tax credit purposes. Foreign sellers can reduce or eliminate withholding by filing Form 8288-B before closing.

**Real-World Application:**
At Sirius Tax Group, we've successfully guided foreign nationals through FIRPTA compliance and ITIN applications for property sales. Recent clients from Asia and the Middle East both obtained ITINs and are receiving their withholding refunds—a testament to comprehensive, culturally sensitive advisory.

**Why This Matters:**
Many foreign nationals overlook FIRPTA requirements or lack access to expert guidance. Tax professionals who specialize in international clients gain competitive advantage and build client loyalty by providing clear, proactive FIRPTA counsel.

If you're looking to expand your international tax practice or need FIRPTA guidance for clients, let's connect.

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We recently received ITIN approval for a client in Asia. Our client, a Japanese national, sold property and needed an ITIN in conjunction with the sale, which was subject to FIRPTA withholding.

Our clients are extremely happy and we look forward to assisting them in getting them their withholding back, next year. The entire process was seamless and stress-free. They felt heard, understood, and empowered—right here in Silver Spring.

Curious how we can help you or your family? Let’s talk. 😊

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