đ Challenges Foreign Sellers Face With EFTPS Enrollment and Use
FIRPTA withholding payments must now be made electronically through EFTPS, creating new challenges for foreign sellers, buyers, and real estate professionals. Learn how PIN delays, account setup, and
As youâre aware, the new IRS mandate requiring all FIRPTA withholding payments to be made electronically through the Electronic Federal Tax Payment System (EFTPS) takes effect on September 30, 2025âand the IRS is already falling behind.
This change introduces significant challenges for many foreign sellers and buyers involved in U.S. real estate transactions.
Setting up an EFTPS account is not straightforward: it requires a valid U.S. Taxpayer Identification Number (TIN), a U.S. mailing address, and up to 10+ business days to receive a PIN by postal mail. However, PIN delivery has been consistently delayedâeven to U.S. addresses. Without the PIN, account activation canât be completed, and failure to pay within the IRSâs 20-day FIRPTA deadline can trigger automatic penalties and interest.
Foreign sellers, often unfamiliar with U.S. tax systems, face further complications. The EFTPS platform is not designed for real estate transactions, and there is little guidance available for navigating it. Critically, buyers and sellers remain fully liable for penaltiesâeven if a closing agent assists.
Key Challenges:
1. PIN Delays Are Already Happening
Although the IRS states 5â10 business days for delivery, PINs often donât arrive at all within that windowâeven at U.S. addresses. This delays EFTPS access and risks FIRPTA non-compliance.
2. U.S. Mailing Address Requirement
Foreign sellers without a U.S. address must rely on attorneys, agents, or relatives to receive the PINâintroducing risk and logistical complexity.
3. Complex Enrollment Process
The EFTPS system requires knowledge of U.S. tax forms and identity verification steps that many foreign users are unfamiliar with.
4. Tight IRS Deadline With No Flexibility
FIRPTA payments must be made electronically within 20 days of closing. Without an active EFTPS account, sellers (or buyers on their behalf) may face immediate penalties.
5. Limited IRS Support for International Users
Support for PIN issues, address changes, or delayed delivery is minimal and often not responsive for non-U.S. participants.
6. Language and Navigation Barriers
The EFTPS platform is not intuitive for international users, especially non-native English speakers or those without prior IRS experience.
â What Weâre Doing to Help
We are currently working on a new format to simplify how FIRPTA-related IRS payments can be made under the upcoming electronic-only requirement.
Our goal is to make this process clearer, faster, and more manageable for everyone involvedâespecially foreign sellers and real estate professionals.
Our solution will be in place and ready no later than September 1, 2025, well ahead of the IRS enforcement deadline on September 30.
FIRPTA is changingâour job is to make it easier for everyone.
