FIRPTA FEARS: How To Avoid Costly Penalties
FIRPTA (Foreign Investment in Real Property Tax Act) can lead to serious consequences if ignored—buyers, sellers, and real estate professionals alike face penalties, interest, and even the potential for property confiscation if FIRPTA compliance is overlooked. Don’t let FIRPTA mistakes cost you big. Let’s dive into what’s at stake and how you can protect yourself!
Buyers Could Be on the Hook for Tens of Thousands—Or Worse
As the buyer of a property from a foreign seller, you’re responsible for withholding 15% of the sales price. It sounds simple, but missing this step can make YOU liable for up to 15% of the sale price! Imagine shelling out that amount on top of your purchase. And that’s just the start. You’ll also be hit with penalties and interest that can compound over time, draining even more from your pocket.
Worst-case scenario? The IRS could come knocking and seize the property itself to cover the unpaid taxes. Yes, that’s right—your dream home or investment property, gone because of a missed FIRPTA step. Compliance is key to protecting your investment!
Late Filings = Costly Delays
Not filing the required IRS Forms within 20 days? Imagine having to explain to your clients why they owe extra money in the thousands because a simple form was filed late. Worse, delay it long enough, and you could be dealing with serious IRS scrutiny—something no one wants.
Interest Piling Up on Unpaid Taxes
Didn’t get the withholding right? Prepare for interest on top of the unpaid taxes to start building up like a snowball rolling downhill. The longer it goes unresolved, the bigger the financial hit. What starts as a minor oversight can explode into a massive liability that keeps growing until it's paid off in full.
Yes, the IRS Can Take Your Property…
Think that sounds dramatic? It’s happened. In extreme cases, the IRS has confiscated properties to cover unpaid FIRPTA taxes. Skipping FIRPTA compliance is not just a minor mistake—it can literally cost you the property you just bought. This isn’t a far-fetched scenario; it’s the law, and it’s happened to those who thought they could get away with cutting corners. This is one of the most serious FIRPTA consequences and should be a top concern for buyers and real estate professionals alike.
The Good News? FIRPTA Solutions Has You Covered!
The penalties for non-compliance are steep—there’s no sugar-coating that. But the great news is you don’t have to navigate these dangerous waters alone.
FIRPTA Solutions takes the entire process off your hands, handling every detail with precision. From calculating the correct withholding to making sure the IRS gets what it needs on time, we ensure that you (and your clients) never face the nightmare of penalties, interest, or even property confiscation.
DON’T RISK IT—let us handle FIRPTA for you. With FIRPTA Solutions in your corner, you can rest easy, knowing your transaction is in expert hands.
Ready to protect your transaction? Contact FIRPTA Solutions today! Your peace of mind is just a call away.
View All Posts
