IRS Payment Process Changes for FIRPTA and Federal Tax Liens Under Executive Order 14247

Stewart Title Guaranty Company is notifying all trusted partners about significant upcoming changes to IRS payment processes, specifically for the Foreign Investment in Real Property Tax Act (FIRPTA) and Federal Tax Liens, as mandated by Executive Order 14247. The Department of the Treasury will require all federal disbursements, including IRS payments for FIRPTA and Federal Tax Liens, to be made electronically via the Electronic Federal Tax Payment System (EFTPS). Once the IRS fully implements this mandate, paper checks will no longer be accepted. Failure to comply may result in penalties, interest charges, or delays in transaction processing.

The Executive Order stipulates that all funds submitted to the federal government must be processed electronically (with several exceptions) as soon as practicable. This means that in the near future, the IRS will mandate that all payments under FIRPTA and for Federal Tax Liens be made electronically. As of the date of this Bulletin, the IRS website states that paper checks are still an acceptable payment method.

FIRPTA applies when a foreign seller transfers U.S. real property. Buyers must withhold 15% of the sale price (unless exemptions apply), file IRS Forms 8288 and 8288-A, and send the payment within 20 days. To comply, set up an EFTPS account at EFTPS.gov. Missing this requirement may lead to penalties or delays.

This information is provided by Stewart Title Guaranty Company for general knowledge and is not legal or tax advice. Stewart Title Guaranty Company is not responsible for any errors or omissions or for any actions taken based on this information.