Letter 3311 is one of the IRS withholding certificate letters used under FIRPTA. It approves a reduced amount of withholding. It is not an Appeals decision letter.

What This Letter Means

When a foreign person sells a U.S. real property interest, the buyer generally must withhold part of the amount realized and send it to the IRS. The buyer, the buyer's agent, or the seller can apply for a withholding certificate to adjust that amount. Letter 3311 means the IRS approved the application and set a lower withholding amount than the standard rule.

The IRS can issue a reduced withholding certificate when the standard withholding would be more than the seller's maximum tax liability, or when withholding a reduced amount will not put collection of the tax at risk.

What to Do

  • Make sure the buyer or other withholding agent receives a copy.
  • Withhold the amount the certificate approves.
  • Attach the certificate to Form 8288, U.S. Withholding Tax Return for Certain Dispositions by Foreign Persons. When a withholding certificate is attached, the Form 8288 due date runs from the date of the certificate letter, generally 20 days after that date, rather than 20 days from the transfer.
  • Keep the letter with the closing documents.

For the Seller

A withholding certificate does not end the seller's filing obligation. The seller still reports the sale on a U.S. income tax return for the year of sale and claims credit for the amount withheld.

Check that the names, identifying numbers, property, and amounts on the letter match the transaction. Errors can delay credit for the withholding.

If you're handling a FIRPTA sale and need help with the withholding certificate, call us at (813) 229-7100.