Our closing agent used a FIRPTA exception certification but never sent the required copy to the IRS. Does that break the exception?
The transaction relied on an exception to withholding and everyone was relieved to avoid moving a large amount of cash at closing. Only afterward did we learn that the regulations may have required the certification or statement to be furnished to the IRS and that the closing file may not actually show that step happening.
That raises the ugly possibility that the whole exception was not effective even if the substantive facts were otherwise fine. I need to know whether this is just a technical loose end or whether the IRS treats failure to furnish the required copy as a real problem that can collapse the exception itself.
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