🧾 Seller’s Affidavit of Nonforeign Status (FIRPTA) – Agent FAQs

  1. What is the Seller’s Affidavit of Nonforeign Status?

Explanation:
It’s a document where the seller certifies under penalty of perjury that they are not a foreign person under the Foreign Investment in Real Property Tax Act (FIRPTA). This affidavit exempts the buyer from having to withhold 15% of the sale price for IRS tax withholding.

  1. Is the seller required to complete this affidavit in every transaction?

Explanation:
Yes, unless the seller is a foreign person—in which case, the buyer may be required to withhold and remit 15% of the sale price to the IRS. U.S. persons (including green card holders) must sign this to avoid withholding.

  1. Who is responsible for collecting the FIRPTA affidavit—the buyer or listing agent?

Explanation:
Technically, the buyer is responsible for FIRPTA compliance. However, it is common practice for the listing agent or escrow officer to collect the affidavit from the seller and deliver it to the buyer or escrow to ensure compliance.

  1. Where is the FIRPTA form found and who prepares it?

Explanation:
The form may be prepared by:

  • Escrow officer (commonly)
  • Broker/agent using a template
  • Seller’s attorney or CPA (if needed for foreign tax planning)

It is not a California Association of Realtors® (C.A.R.) standard form, but many escrow companies provide a standard version.

  1. What happens if the seller refuses to sign the affidavit?

Explanation:
If the seller doesn’t sign and cannot prove U.S. status, the buyer must withhold 15% of the sale price and send it to the IRS using Form 8288. The broker should advise the agent to:

  • Notify the buyer
  • Involve escrow
  • Recommend legal/tax advice
  1. What documentation must accompany the affidavit?

Explanation:
The seller typically includes their:

  • Name
  • U.S. taxpayer identification number (SSN or ITIN)
  • Address
    This confirms their nonforeign status under FIRPTA and protects the buyer from IRS penalties.
  1. Who is liable if FIRPTA isn’t followed?

Explanation:
The buyer is legally responsible for withholding and remitting to the IRS, but agents and brokers can be liable if they:

  • Have actual knowledge the seller is foreign
  • Fail to disclose or advise proper steps
    That’s why CAR Form RCSD-S (Receipt for Contingency/Seller Disclosures – Seller) often references FIRPTA.
  1. Can an LLC or trust sign the FIRPTA affidavit?

Explanation:

  • LLC taxed as a partnership or corporation: May not qualify to sign the affidavit unless it is a disregarded entity and the underlying person is a U.S. person.
  • Trusts: Only the grantor or beneficiary can certify nonforeign status—not the trust itself.

Agents should check with escrow or legal counsel when sellers are entities.

  1. Do foreign sellers ever get the money back?

Explanation:
Yes. Foreign sellers can file a U.S. tax return and claim a refund if their actual tax owed is less than the 15% withheld. This is between the seller and the IRS.

  1. Is this form needed in all California transactions?

Explanation:
Yes, if the seller is an individual (or entity) and the property is real property interest, the FIRPTA rules apply—regardless of price or location. Even though FIRPTA is federal, it applies in every California property sale.