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An escrow officer had a closing where the seller was a foreign national. The buyer and seller instructed her to withhold and remit 10% to the IRS at closing. The escrow officer decided she disagreed with our policy and procedure described in Tech Memo 120–2010. She felt it was good customer service to complete the forms herself. She typed up the forms (8288 and 8288–A, copies a, b and c) and had the buyer sign the 8288. 

The escrow officer did not have the seller read and review the forms. She did not proofread her work. She did not have anyone else proofread her work. She closed and sent the forms along with the payment to the IRS. 

The file closed in August 2013. In November the seller tried to obtain a refund from the IRS, but the IRS did not show the credit for the payment against the seller's taxpayer I.D. number. After many calls to the IRS, the seller discovered the payment was credited to another taxpayer. 

The payment was credited to the number reflected on the 8288–A which contained a typo. The escrow officer inadvertently typed in the incorrect taxpayer I.D. number on the form. Her typo was causing a delay in the seller receiving his refund. The seller was MAD. He demanded she fix her mistake. 

She contacted National Escrow Administration. National Escrow Administration asked her to send over copies of the 8288, 8288–A, proof of delivery and the 8821 for the seller. The escrow officer sent over the 8288, 8288–A and proof of delivery. National Escrow Administration asked again for the 8821. She replied she did not obtain one. Great! 

This means the IRS will not talk with us to have the error corrected. The seller would not cooperate because he was very angry and unsatisfied with the escrow officer's customer service. He did not trust the Company enough to give us power of attorney. 

The seller felt we should simply open a claim, pay him the amount of his refund and deal with the IRS ourselves to recoup our loss – otherwise he threatened to bring legal action against us. The operation had to take a $6,800 loss to pay him. 

 

 
 
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