Claiming a Late FIRPTA Refund: It May Not Be Too Late
Many international DVC sellers complete their sale, accept the 15% FIRPTA withholding, and never file a US tax return to claim the refund. Years later, some realize they left thousands of dollars with the IRS. Whether you can still recover that money depends on when you sold.
The Three-Year Rule
The IRS gives you three years from the original due date of the tax return to file a refund claim. For most DVC sellers, the tax return for a sale year is due June 15 of the following year (the standard due date for non-resident returns). So if your DVC sale closed in 2022, your return was due June 15, 2023, and you have until June 15, 2026 to file and still receive a refund.
After three years, the IRS is no longer required to issue the refund. The money stays with the government permanently.
What You Need to File Late
You need the same documents as an on-time return: Form 1040-NR reporting the DVC sale, proof of what you paid for the contract (cost basis), and either your stamped Form 8288-A or the unstamped copy from your closing agent. If your stamped 8288-A is lost, request a transcript from the IRS showing the withholding that was applied.
Penalties and Interest
If you owe tax (meaning your actual tax exceeds the withholding, which almost never happens on a DVC sale), filing late would trigger penalties and interest. But if you are owed a refund — which is the typical situation — the IRS does not charge penalties for late filing when there is a refund due. You simply receive less interest than you would have earned filing on time.
Amended Returns
If you filed a 1040-NR for the sale year but made errors (forgot to deduct closing costs, used the wrong cost basis), you can file an amended return using Form 1040-X within the three-year window. A higher cost basis means a smaller gain, a smaller tax, and a larger refund.
If you are unsure whether the three-year window is still open for your sale, contact us and we can help you determine the filing deadline.
