APPLY FOR A U.S. TAX IDENTIFICATION NUMBER

BEFORE THE IRS REORGANIZATION TAKES PLACE
 

May 8, 2006

Thomas C. Roberge & Company

St. Petersburg and Sarasota   

Telephone: (727) 822-9393
Contact: TaxInfo@RobergeCo.com
 
Copyright, 2006, Thomas C. Roberge & Company
All Rights Reserved
 
 

The IRS is currently reorganizing most of their services affecting foreign taxpayers in 2006.  It is going to affect every foreign person who has a real estate sale in 2006 and thereafter.  It is also going to impact closing agents in reporting these sales.

The changes are major.  For as far back as we can remember foreign taxpayers filed their U.S. income tax returns with the Philadelphia Service Center.  They obtained their U.S. Taxpayer Identification Numbers and had their 10% withholding on U.S. real property sales processed through the Philadelphia Center.  We have always dealt with experienced career personnel, many who had 15, 20 or more years dealing with nonresident taxpayers.  When things went wrong or we needed something we could go to these individuals who worked in close proximity to each other and get the problem handled efficiently in most cases.

Now all that is changing.  The 10% withholding for U.S. real property sales (FIRPTA withholding) is going to be handled by the Service Center in Ogden, Utah.  U.S. Taxpayer Identification Numbers are going to be processed out of the Austin, Texas Service Center.  It is uncertain how discrepancies in taxpayer identification numbers will be handled when foreign taxpayers file their 2006 U.S. income tax returns for refunds due to the 10% withholding.  Where U.S. nonresident income tax returns will be filed and how the taxpayer identification numbers and payments will be matched up is uncertain.

The point we want to make is to obtain your U.S. taxpayer identification number now if you do not already have one.  Do not wait until your real estate is sold, or worse yet, until you file your 2006 U.S. income tax return.

Our firm is an IRS Certified Acceptance Agent and can process applications for Individual Taxpayer Identification Numbers.  There are some seldom-used strategies and exceptions we use successfully on a consistent basis to obtain these numbers.  The bigger benefit of using our firm is that we can streamline the documentation and certification requirements because of our status as a Certified Acceptance Agent.  We can also make sure that the closing agent has this number when the property is sold and the 10% is sent to the IRS.  This ensures that the funds will be credited to your account and not just put in the general master file account of the IRS.  We perceive that there will be significant problems for foreign sellers who close in 2006 without a taxpayer identification number.  That problem could become an ugly reality when one files their 2006 U.S. income tax return for a refund in 2007.

Don't wait - call us now at (727) 822-9393 to file for your U.S. Individual Taxpayer Identification Number to minimize the possibility of your being negatively impacted by these changes that are going on in the IRS.