Under certain categories the Transferor (foreign person or entity) or Transferee can submit a Form 8288-B ("Application for Withholding Certificate for Disposition by Foreign Persons of U.S. Real Property Interests"), to request a reduction or elimination of withholding on a transfer of a USRPI. Refer to IRC Regulation 1.1445-3 for the different categories. The IRS has 90 days from receipt of a complete 8288-B application to respond to the request. If by the 45th day the IRS determines it will be unable to process the 8288-B by the 90th day, then the IRS will mail an interim letter to the originator of Form 8288-B.
The regulations permit the transferor to request an early refund of the FIRPTA money upon receipt of a reduced or exempt withholding certificate when Form 8288 has been filed and paid. A refund can be made to the seller (transferor) of the property within the same year of transfer, so long as the return (Form 8288) has been filed, paid and has a withholding certificate attached.
Under IRC Section 897(i), a foreign corporation that holds a U.S. real property interest, and under any treaty obligation is entitled to nondiscriminatory treatment with such interest, can elect to be treated as a domestic corporation for purposes of this section, section 1445 and 6039C. There is no requirement for filing Form 8288 once the election has been made and approved.
