IRS Form 8288-B – IRS Forms, Instructions, Pubs 2026 – In the complex world of U.S. tax regulations, foreign persons disposing of U.S. real property interests often face withholding requirements under the Foreign Investment in Real Property Tax Act (FIRPTA). IRS Form 8288-B serves as a key tool to potentially reduce or eliminate this withholding tax. This SEO-optimized guide explores everything you need to know about Form 8288-B, including its purpose, filing requirements, and step-by-step instructions. Whether you’re a foreign investor, real estate professional, or tax advisor, understanding this form can help navigate FIRPTA compliance efficiently.
What Is IRS Form 8288-B?
IRS Form 8288-B, titled “Application for Withholding Certificate for Dispositions by Foreign Persons of U.S. Real Property Interests,” is used to request a certificate from the IRS that allows for reduced or zero withholding on the sale or disposition of U.S. real estate by foreign individuals or entities. This form applies under section 1445 of the Internal Revenue Code, which generally requires buyers (transferees) to withhold a percentage of the sale proceeds—typically 15%—when purchasing U.S. real property from foreign sellers (transferors).
The withholding certificate can certify that the foreign seller’s tax liability is less than the standard withholding amount or that an exemption applies, preventing over-withholding and ensuring funds aren’t unnecessarily tied up. Without this certificate, the buyer must withhold and remit the tax using Forms 8288 and 8288-A. As of the latest revision in December 2025, the form remains a critical component for FIRPTA transactions.
Who Needs to File Form 8288-B?
Form 8288-B is primarily for foreign persons or entities selling U.S. real property interests, but it can be filed by either the transferor or the transferee. Here’s a breakdown:
- Foreign Transferors: Non-U.S. residents, foreign corporations, partnerships, trusts, or estates disposing of U.S. real estate, such as land, buildings, or interests in U.S. real property holding corporations.
- Transferees (Buyers): U.S. or foreign buyers who want to minimize withholding liability, especially if they believe the seller qualifies for reduced withholding.
- Withholding Agents: In certain cases, such as under section 1445(e) for distributions by corporations or trusts.
If you’re a nonresident alien without a Taxpayer Identification Number (TIN), you can apply for an Individual Taxpayer Identification Number (ITIN) by attaching Form W-7 to Form 8288-B. This form isn’t required for all transactions—exemptions may apply for sales under $300,000 intended for personal residence or if a non-foreign affidavit is provided.
When Should You File Form 8288-B?
Timing is crucial to avoid delays in closing real estate deals. Submit Form 8288-B as early as possible, ideally before the date of transfer. If filed on or before the disposition date and still pending, the buyer must withhold the tax but can defer payment until the IRS responds—typically within 90 days.
For installment sales, special rules under Revenue Procedure 2000-35 allow for reduced withholding on payments over time. Always file if you anticipate the actual tax owed will be less than the withheld amount to reclaim excess funds promptly.
How to Complete IRS Form 8288-B: Step-by-Step Guide?
Form 8288-B is a two-page document with detailed sections. Here’s a structured overview based on the current version:
| Section | Key Fields | Tips |
|---|---|---|
| Transferor Details (Line 1) | Name, TIN (SSN, EIN, or ITIN), address | Use physical address only—no P.O. boxes. Attach sheets for multiple transferors. |
| Transferee Details (Line 2) | Name, TIN, address | Similar to Line 1; required even if transferor is applying. |
| Applicant Role (Line 3) | Check transferor or transferee | Indicate who is submitting the application. |
| Withholding Agent (Line 4) | Name, TIN, entity details if applicable | Often the buyer or escrow agent. |
| Certificate Mailing Address (Line 5) | Address, optional phone | Where the IRS should send the certificate. |
| Transaction Description (Line 6) | Date of transfer, contract price, type of interest (e.g., real property, personal property), use of property, adjusted basis, location/description, prior tax filings | Be precise; attach explanations for “other” uses or complex descriptions. Include 3-year tax history. |
| Reason for Certificate (Line 7) | Check a (exempt/nonrecognition), b (liability < withholding), or c (installment sales) | Support with attachments like tax calculations or legal summaries. |
| Unsatisfied Liability (Line 8) | Yes/No, with calculation if yes | Provide evidence if prior withholding issues exist. |
| Section 1445(e) Transactions (Line 9) | Yes/No, transaction type, applicant role | For special distributions; check applicable boxes. |
| Signature | Signature, title, date | Under penalties of perjury. |
Ensure all fields are completed accurately, as incomplete forms may lead to rejection.
Required Documentation and Attachments
To support your application, include:
- For Exemption Claims (Line 7a): Description of transfer, legal basis for exemption, evidence of no prior withholding liability, and property valuation (e.g., appraisal).
- For Reduced Liability (Line 7b): Detailed tax calculation, including amount realized, adjusted basis, capital gains rates, and any treaty benefits. Attach contracts, basis docs, and appraisals.
- For Installment Sales (Line 7c): Transferee’s agreement to withhold on future payments and notify IRS of any disposition.
- Form W-7: If applying for an ITIN.
- Additional Sheets: For multiple parties or detailed explanations.
Failure to include these can delay processing.
The Filing Process for Form 8288-B
Mail the completed form and attachments to:
Internal Revenue Service Center
P.O. Box 409101
Ogden, UT 84409
Electronic filing isn’t available. If approved, the IRS issues a withholding certificate, which the buyer uses to adjust withholding. If denied, full withholding applies, and you may need to file a tax return to claim a refund.
Recent Updates and Changes as of 2026
The form was last revised in December 2025, with no major structural changes from prior years. However, keep an eye on IRS announcements for any adjustments related to FIRPTA rates or exemptions. For instance, withholding rates remain at 15% for most transactions, but reduced rates may apply under treaties or specific rules. Always consult Publication 515 for the latest guidance on withholding for nonresident aliens and foreign entities.
Common Mistakes to Avoid When Filing Form 8288-B
- Incomplete Information: Missing TINs, addresses, or attachments lead to rejections.
- Timing Issues: Filing too late can force full withholding.
- Inaccurate Calculations: Overstate or understate tax liability without proper documentation.
- Ignoring Section 1445(e): For corporate distributions, specify the correct transaction type.
- Not Attaching Form W-7: Essential for those without a TIN.
Consult a tax professional to avoid these pitfalls and ensure compliance.
Conclusion: Streamline Your FIRPTA Compliance with Form 8288-B
Navigating IRS Form 8288-B is essential for foreign sellers looking to minimize withholding on U.S. real estate dispositions. By filing promptly and providing thorough documentation, you can secure a withholding certificate that aligns with your actual tax obligations. For the most current form, download it directly from the IRS website at https://www.irs.gov/pub/irs-pdf/f8288b.pdf. If you’re involved in a FIRPTA transaction, start the application process early to facilitate a smooth closing. For personalized advice, reach out to an IRS-certified tax expert.