The Foreign Investment in Real Property Tax Act requires buyers in certain transactions involving foreign sellers to withhold funds for federal taxes. Does either agent have liability in such a transaction where the seller falsely certifies that he is not a foreign seller?

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  • The Foreign Investment in Real Property Tax Act requires buyers in certain transactions involving foreign sellers to withhold funds for federal taxes. Does either agent have liability in such a transaction where the seller falsely certifies that he is not a foreign seller?

Possibly. If an agent knows that a certification is false and fails to notify the buyer of this knowledge, that agent will be responsible for paying the tax to the IRS. This payment is limited to the amount of commission that the agent earned in the transaction.

Source: TAR

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