General Instructions for Section — 0126 Inst 8288 (PDF)

Section 1446(f)(4) generally imposes a withholding obligation on a partnership that makes a distribution to a transferee partner that failed to withhold the required amount under section 1446(f)(1) when it acquired an interest in the partnership. Withholding under section 1446(f)(4) applies to transfers of interests in partnerships, other than publicly traded partnerships (PTPs), that occur on or after January 1, 2023.

Who Must File Unless an exception applies (see Exceptions to Section 1446(f)(4) Withholding , later), a partnership that makes a distribution to a transferee partner that failed to properly withhold under section 1446(f)(1) must complete and file Part IV of Form 8288 to report and transmit the amount withheld.

Amount To Withhold The partnership must generally withhold the entire amount of each distribution made to the transferee partner until it has met its withholding obligation under section 1446(f) (4). Generally, the partnership’s withholding obligation will be 10% of the amount realized on the transfer, plus interest. See Withholding Under Section 1446(f)(4) , later.

10 Instructions for Form 8288 (Rev. 1-2026)

When To File A partnership must file Form 8288 and transmit the tax withheld to the IRS by the 20th day after the date of the distribution to the transferee.

Where To File Send Form 8288 with the amount withheld, and copy A of Form(s) 8288-C to:

Ogden Service Center P.O. Box 409101 Ogden, UT 84409

Form 8288-C Must Be Attached A partnership should file a separate Form 8288 with Part IV completed and only one Form 8288-C attached for each distribution per transferee partner subject to the withholding requirements of section 1446(f)(4). Copy A of Form 8288-C must be attached to Form 8288. Copy B is sent to the transferee(s). Copy C is for your records.

Transferor’s taxpayer identification number (TIN) missing. If you do not have the transferee’s TIN, you must still file Forms 8288 and 8288-C. The IRS will send a letter to the transferee requesting the TIN and provide instructions for how to get a TIN.

Tip: For the definitions of transfer, transferee, and transferor, see Definitions for Section 1446(f)(1) Withholding, earlier.

Penalties Under section 6651, penalties apply for failure to file Form 8288 when due and for failure to pay the withholding when due. In addition, if you are required to but do not withhold tax under section 1446(f)(4), the tax, including interest, may be collected from you. Under section 7202, you may be subject to a penalty of up to $10,000 for willful failure to collect and pay over the tax. The general partner(s) or other responsible persons may be subject to a penalty under section 6672 equal to the amount that should have been withheld and paid over to the IRS.

Exceptions to Section 1446(f)(4) Withholding

Withholding has been satisfied by transferee. A partnership is not required to withhold under section 1446(f)(4) if it relies on a timely certification of withholding received from the transferee that states that an exception to withholding applies or that the transferee withheld the full amount required to be withheld.

PTP interests. A PTP is not required to withhold under section 1446(f)(4).

Distributing partnerships. A partnership that is a transferee because it made a distribution subject to section 1446(f)(1) is not required to withhold under section 1446(f)(4).

Withholding Under Section 1446(f)(4)

Certification of withholding. A partnership must determine the amount realized on the transfer and any amount withheld by the transferee based on a certification of withholding from the transferee, without regard to

whether the certification is received timely. A partnership may not rely on the certification of withholding if it knows or has reason to know that it is incorrect or unreliable. A partnership that already possesses a certification of nonforeign status (including a Form W-9) for the transferor may instead rely on this certification to determine that it has no withholding obligation. However, if the partnership receives a certification of withholding that is inconsistent with the information on the certification of nonforeign status in its possession, the partnership is treated as having actual knowledge, or reason to know, that the certification of nonforeign status is incorrect or unreliable.

A partnership that does not receive or cannot rely on a certification from the transferee must withhold under section 1446(f)(4) until it receives a certification that it can rely on.

Notification from the IRS. A partnership that receives notification from the IRS that a transferee has provided incorrect information regarding the amount realized or amount withheld on the certification or has failed to pay the IRS the amount reported as withheld on the certification must withhold the amount prescribed in the notification on any distributions made to the transferee on or after the date that is 15 days after it receives the notification. The IRS will not issue a notification on the basis that the amount realized on the certification is incorrect if it determines that the transferee properly relied on a certification that included the incorrect information to compute the amount realized.

Subsequent transferees. A partnership is not required to withhold on distributions that are made after the date on which the transferee disposes of the transferred interest, unless the partnership has actual knowledge that any person that acquires the transferee’s interest in the partnership is a related person, that is, a person that bears a relationship described in section 267(b) or 707(b)(1) with respect to the transferee or the transferor from which the transferee acquired the interest.

When to withhold. A partnership must withhold on distributions made with respect to a transferred interest beginning on the later of:

The date that is 30 days after the date of transfer, or
The date that is 15 days after the date on which the partnership acquires actual knowledge that the transfer has occurred.

A partnership is treated as satisfying its withholding obligation and may stop withholding on distributions with respect to a transferred interest on the earlier of:

The date on which the partnership completes withholding and paying the amount required to be withheld, or
The date on which the partnership receives and may rely on a certification from the transferee (without regard to whether such certification is timely received) that claims an exception to section 1446(f)(1) withholding.

Amount of withholding. A partnership required to withhold under section 1446(f)(4) must withhold the full amount of each distribution made with respect to the transferred interest until it has withheld:

A tax of 10% of the amount realized (generally the amount realized on the transfer determined solely under

Instructions for Form 8288 (Rev. 1-2026) 11

Regulations section 1.1446(f)-2(c)(2)(i)), reduced by any amount withheld by the transferee; plus

Any interest computed on the amount that should have been withheld.

However, any amount of a distribution that is required to be withheld under another withholding provision (such as under section 1441 or 1442) is not also required to be withheld under section 1446(f)(4).

Withholding following a notification from the IRS. A partnership that receives notification from the IRS (discussed earlier) must withhold the amount prescribed in the notification on any distributions made to the transferee on or after the date that is 15 days after it receives the notification.

Computation of interest. The amount of interest required to be withheld is the amount of interest that would be required to be paid under section 6601 and Regulations section 301.6601-1 if the amount that should have been withheld by the transferee was considered an underpayment of tax. Interest is payable between the date that is 20 days after the date of the transfer and the date on which the transferee’s withholding tax liability due under section 1446(f)(1) is satisfied.

Buyer/Transferee Claiming Refund of Section 1446(f)(4) Withholding A transferee may claim a refund for an excess amount if it has been overwithheld upon under section 1446(f)(4). An excess amount is the amount of tax and interest withheld that exceeds the transferee’s withholding tax liability plus any interest owed by the transferee with respect to such liability. The transferee may also be liable for any applicable penalties or additions to tax. A transferee must complete Part V of Form 8288 and attach Form(s) 8288-C it received from the partnership when making a claim for refund of section 1446(f)(4) withholding.