In late September, the IRS Large Business and International (LB&I) Division added a new compliance campaign to its active campaigns list. This applies to non-resident aliens who plan on selling their U.S. real property.
FIRPTA reporting compliance for NRAs. The Foreign Investment in Real Property Tax Act (FIRPTA) taxes nonresident aliens (NRAs) on the disposition of their U.S. real property interests. Generally, the buyer/transferee is the withholding agent and is required to withhold 15% of the amount realized on the sale, file the required forms and remit any taxes owed to the IRS.
This LB&I campaign is intended to increase FIRPTA voluntary compliance through issue-based examinations and external education and outreach. The IRS notes that an issue-based approach should be used when performing risk analysis to identify issues that are material or have significant compliance risk.
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