IRS RESPONSE TO RECOMMENDATION: ​IRS will develop a timeline for e-filing FIRPTA forms. The FIRPTA Forms 8288, 8288-B and 8288-C are on the electronic development listing for future expansion, and the timing will depend on available resources.

The IRS agrees and supports expanding digital tools to improve international withholding relief programs; however, implementation depends on available resources, funding, and IT prioritization. Accordingly, the IRS cannot provide a definitive timeline for full e-filing capability or a comprehensive secure portal for FIRPTA, U.S. Residency Certification, and Form 8233 at this time. The IRS will continue to evaluate digital enhancements as part of its broader modernization strategy, subject to funding and competing priorities.

CORRECTIVE ACTION: IRS will develop a timeline for e-filing FIRPTA forms. The FIRPTA Forms 8288, 8288-B and 8288-C are on the electronic development listing for future expansion, and the timing will depend on available resources.

The IRS will continue to evaluate digital enhancements as part of its broader modernization strategy, subject to funding and competing priorities.

TAS RESPONSE: TAS appreciates the IRS’s agreement to develop a timeline for e-filing FIRPTA forms and its support for expanding digital tools for international withholding relief programs. TAS recognizes that funding, resources, and IT prioritization affect the pace of modernization, and that the IRS cannot implement every needed improvement at once. However, these constraints should not lead the IRS to continue pushing these projects down the road without establishing concrete next steps. TAS encourages the IRS to develop and publish realistic interim milestones, continue evaluating secure communication and status-update tools, and ensure these programs remain part of the IRS’s broader modernization strategy rather than being deferred indefinitely.

ADOPTED, PARTIALLY ADOPTED or NOT ADOPTED: Partially Adopted

OPEN or CLOSED: Open

DUE DATE FOR ACTION (if left open): Ongoing

IRS RESPONSE TO RECOMMENDATION: The IRS currently provides processing timeframes on various returns, forms and correspondence on IRS.gov through the Processing status for tax forms IRS webpage (https://www.irs.gov/help/processing-status-for-tax-forms), which is updated on a regular basis. This resource is available to individual and business taxpayers, as well as tax professionals, to help set general expectations regarding processing timeframes. The applicable “About Form [ ]” pages on IRS.gov for forms related to international withholding have been updated with links to the current processing status page.

The IRS cannot commit to providing clear notices of specific potential delays on IRS.gov pages. Processing delays can vary significantly based on a range of factors, including workload fluctuations, inventory levels, and case-specific complexities, which change frequently. As a result, maintaining accurate and timely delay-specific notices across all affected programs is not operationally feasible. The IRS will continue to provide general processing timeframe updates and evaluate opportunities to improve transparency within existing capabilities.

CORRECTIVE ACTION: The IRS currently provides processing timeframes on various returns, forms and correspondence on IRS.gov through the Processing status for tax forms IRS webpage (https://www.irs.gov/help/processing-status-for-tax-forms), which is updated on a regular basis.

The IRS will continue to provide general processing timeframe updates and evaluate opportunities to improve transparency within existing capabilities.

TAS RESPONSE: TAS recognizes that the IRS has general processing timeframes on the Processing Status page and recognizes that exact delay-specific notices may be difficult to maintain when inventories and case-specific factors fluctuate. However, timeframe information is only useful if taxpayers and representatives are likely to see it, understand it, and appreciate how delays may affect them, particularly in areas where processing has historically been subject to long delays. TAS encourages the IRS to make processing-time information prominent on the pages where taxpayers access these forms, provide plain-language warnings that significant delays may occur, and give taxpayers realistic general expectations even if precise timelines cannot be guaranteed. Clear notice of potential delays is not merely a convenience; it allows taxpayers to plan transactions, manage financial consequences, and make informed decisions consistent with their rights to be informed and to quality service.

ADOPTED, PARTIALLY ADOPTED or NOT ADOPTED: Partially Adopted

OPEN or CLOSED: Closed

DUE DATE FOR ACTION (if left open): N/A

IRS RESPONSE TO RECOMMENDATION: The IRS agrees to consider analyzing the underlying drivers of failure-to-file and failure-to-pay penalty assessments related to FIRPTA to identify systemic issues. Once the initial analysis is complete, the IRS will discuss with appropriate BOD Stakeholders what, if any, steps can be taken to help mitigate any issues and may help prevent unnecessary penalties before they occur. While this review will help inform future improvements, broader changes may depend on modernization efforts and available resources.

CORRECTIVE ACTION: The IRS agrees to consider analyzing the underlying drivers of failure-to-file and failure-to-pay penalty assessments related to FIRPTA to identify systemic issues. Once the initial analysis is complete, the IRS will discuss with appropriate BOD Stakeholders what, if any, steps can be taken to help mitigate any issues and may help prevent unnecessary penalties before they occur. While this review will help inform future improvements, broader changes may depend on modernization efforts and available resources.

TAS RESPONSE: TAS encourages the IRS to establish a clear timeline for completing this analysis, share the results with TAS to the extent possible under privacy limitations, and work with the appropriate Business Operating Divisions to implement corrective actions where systemic issues are identified. To the extent resource limitations prevent the IRS from fixing the issues, the IRS should take practical near-term steps to reduce avoidable penalties and appropriately prioritize these changes so that they are not put on hold indefinitely.

ADOPTED, PARTIALLY ADOPTED or NOT ADOPTED: Partially Adopted

OPEN or CLOSED: Open

DUE DATE FOR ACTION (if left open): Ongoing

IRS RESPONSE TO RECOMMENDATION: Form 8288-B processing is currently a paper-based program, which limits the ability to deploy AI or other risk-based algorithms for automated identification and expedited review of low-risk applications. While the IRS is pursuing broader modernization efforts, including the Zero Paper Initiative to digitize paper submissions, the timeline and potential impact of these efforts on FIRPTA processes are not yet determined. The IRS will continue to evaluate opportunities for future enhancements as capabilities evolve.

CORRECTIVE ACTION: N/A

TAS RESPONSE: TAS understands that the IRS’s current paper-based Form 8288-B process limits its ability to deploy AI or other tools for identifying low-risk applications. However, that limitation underscores the broader problem: reliance on paper prevents the IRS from using modern tools that could reduce delays and improve taxpayer service. As the IRS develops e-filing and digital processing for FIRPTA forms, it should build into that modernization plan the ability to use data analytics, risk-based screening, or other tools to identify applications that may be appropriate for expedited review. Although AI or similar tools may be a later-stage enhancement, the IRS should plan for them now so that digitization does more than replicate the existing paper process in electronic form. A modernized FIRPTA process should help the IRS allocate resources more effectively, reduce unnecessary delays, and better protect taxpayers’ rights to quality service and to a fair and just tax system.

ADOPTED, PARTIALLY ADOPTED or NOT ADOPTED: Not Adopted

OPEN or CLOSED: Closed

DUE DATE FOR ACTION (if left open): N/A

IRS RESPONSE TO RECOMMENDATION: ​The IRS Office of Chief Counsel, together with the Treasury Office of Tax Policy, is currently working on guidance in response to taxpayer feedback on FIRPTA issues, including requests to simplify compliance (other than the two specifically mentioned in the report). For example, two items of guidance relating to FIRPTA were recently issued that, in part, simplified compliance: Notice of Proposed Rulemaking, Domestically Controlled Qualified Investment Entities (REG-109742-25) (October 21, 2025) and Notice 2025-45, Application of Sections 897(d) and (e) to Certain Inbound Asset Reorganizations under Section 368(A)(1)(F) (August 19, 2025).

The IRS Office of Chief Counsel, Large Business & International, and Taxpayer Services will continue coordinated efforts to identify specific areas where additional FIRPTA guidance or clarification would be helpful to simplify compliance. This would include further consideration of issues relating to return-of-capital transactions and lease-accounting rule changes (mentioned in Recommendation 10-5) as part of any broader future FIRPTA guidance project.

CORRECTIVE ACTION: The IRS Office of Chief Counsel, together with the Treasury Office of Tax Policy, is currently working on guidance in response to taxpayer feedback on FIRPTA issues, including requests to simplify compliance (other than the two specifically mentioned in the report).

The IRS Office of Chief Counsel, Large Business & International, and Taxpayer Services will continue coordinated efforts to identify specific areas where additional FIRPTA guidance or clarification would be helpful to simplify compliance. This would include further consideration of issues relating to return-of-capital transactions and lease-accounting rule changes (mentioned in Recommendation 10-5) as part of any broader future FIRPTA guidance project.

TAS RESPONSE: TAS appreciates the IRS’s ongoing efforts, together with Treasury, to identify and address FIRPTA issues where additional guidance may simplify compliance. TAS is encouraged that the IRS will consider return-of-capital transactions and lease-accounting rule changes as part of future FIRPTA guidance efforts. Clearer guidance in these areas would reduce uncertainty, improve compliance, and help taxpayers and withholding agents avoid unnecessary burden.

ADOPTED, PARTIALLY ADOPTED or NOT ADOPTED: Partially Adopted

OPEN or CLOSED: Open

DUE DATE FOR ACTION (if left open): Ongoing

IRS RESPONSE TO RECOMMENDATION: The IRS previously requested an automated process for U.S. Residency Certification requests, and limited external facing capability was implemented which now allows individual taxpayers to upload their Forms 8802 on IRS.gov and the applications are integrated as digital images along with faxes in our Pega platform for manual processing. We agree IRS should evaluate and implement automation for U.S. Residency Certification requests through IRS online accounts. However, implementation depends on available resources, funding, and IT prioritization.

Accordingly, the IRS cannot provide a definitive timeline for full automation.

CORRECTIVE ACTION: The IRS previously requested an automated process for U.S. Residency Certification requests, and limited external facing capability was implemented which now allows individual taxpayers to upload their Forms 8802 on IRS.gov and the applications are integrated as digital images along with faxes in our Pega platform for manual processing. We agree IRS should evaluate and implement automation for U.S. Residency Certification requests through IRS online accounts. However, implementation depends on available resources, funding, and IT prioritization.

Accordingly, the IRS cannot provide a definitive timeline for full automation.

TAS RESPONSE: TAS appreciates the IRS’s commitment to evaluate and implement automation for U.S. Residency Certification requests. The ability for individual taxpayers to upload Forms 8802 through IRS.gov is a positive step, but as discussed in the report, it is not the same as true e-filing or fully automated processing. TAS recognizes that implementation depends on funding, resources, and IT prioritization, but encourages the IRS to establish concrete next steps so automation is not deferred without a clear path forward.

ADOPTED, PARTIALLY ADOPTED or NOT ADOPTED: Partially Adopted

OPEN or CLOSED: Open

DUE DATE FOR ACTION (if left open): Ongoing

IRS RESPONSE TO RECOMMENDATION: The IRS is working to provide guidance to participants in the upcoming 2026 FIFA World Cup and the 2028 Summer Olympics, both of which will take place in the United States. Depending on the timing of the events, available resources, and other relevant considerations, this guidance will be issued either as a news alert distributed to subscribers of IRS’s newsletters (including Withholding Agent and Central Withholding Agreement news subscriptions) or as a dedicated webpage. The materials are expected to include information and resources available to assist participants of these events in better understanding their tax obligations in the United States.

CORRECTIVE ACTION: The IRS is working to provide guidance to participants in the upcoming 2026 FIFA World Cup and the 2028 Summer Olympics, both of which will take place in the United States. Depending on the timing of the events, available resources, and other relevant considerations, this guidance will be issued either as a news alert distributed to subscribers of IRS’s newsletters (including Withholding Agent and Central Withholding Agreement news subscriptions) or as a dedicated webpage. The materials are expected to include information and resources available to assist participants of these events in better understanding their tax obligations in the United States.

TAS RESPONSE: TAS appreciates the IRS’s efforts to provide guidance for participants in these upcoming international events and recognizes that the applicable tax rules can be highly complex, thus making it difficult to provide general advice that will apply to everyone. However, issuing a newsletter or posting high-level guidance on IRS.gov may not be sufficient if affected individuals and payors do not know where to look, are not subscribed to the relevant IRS newsletter, or do not understand how the guidance applies to their circumstances. TAS encourages the IRS to make this guidance highly visible, practical, and centralized, and to develop tools or plain-language resources that help affected taxpayers and withholding agents understand what they need to do and when, without requiring them to navigate the technical rules on their own.

ADOPTED, PARTIALLY ADOPTED or NOT ADOPTED: Partially Adopted

OPEN or CLOSED: Open

DUE DATE FOR ACTION (if left open): Ongoing