In a US property sale subject to FIRPTA, it’s obvious that the seller’s (aka transferor) TIN is important – after all it’s the seller’s tax burden and the seller who will seek any applicable refund of the withholding. Thus, Forms 8288 and 8288-A report seller TIN and an ITIN application for seller can accompany those filings when seller doesn’t possess TIN at sale time (and it’s impossible to obtain within the 20 days of closing that 8288 is due (ITIN processing requires 6-8 weeks). IRS does provide a work-around for seller to claim withholding tax credit when 8288 forms were filed without seller ITIN.
Now, if the buyer is a ‘US person’ such buyer will have a TIN and that will be reported on Form 8288 Line 1. But, if the buyer (aka withholding agent aka transferee) is also foreign and doesn’t have a TIN (and doesn’t apply for one with, or as part of, the 8288 filing) and 8288 is filed without one, how would IRS react?
IRS revenue manual (loosely defined - these manuals instruct in guideline format to its processing agents how to process filings) 03-022-261r provides insight:
If the filer fails to provide a TIN on Line 1 then correspond using IDRS Letter 3104C*. However, first:
Research the return and its attachments (my own guess of meaning: IRS searches 8288 attachments for TIN, in which case no result will turn up if the enclosed documents also do not report buyer’s TIN)
Research the name using local procedures (my own guess of meaning: IRS enters entity name into TIN database in attempt to locate TIN or perhaps will be satisfied even to merely substantiate by locating the taxpayer even though no TIN is located, in which case no result will turn up for a foreign taxpayer who never applied for a TIN)
*FIRPTA and Foreign Partnership Withholding Tax Return Processing and Unsubstantiated Refundable Cr IRS uses to correspond asking for the missing information.
I don’t see good chances here without TIN. While I don’t have actual knowledge to rule out ‘FOREIGNUS’ as acceptable to IRS, I wouldn’t bet on it. Note that buyer may similarly be attempting to procure a TIN such as for purposes of rental and/or insuring the property.