I got an email yesterday from a title officer in Texas (hi, Chip, and thanks!) who was interested in any wrinkles I might know about in the universe of withholding.  He will be giving some training sessions on this topic. I gave him a call this morning and chatted briefly this morning on the phone.

No, I don't know of any wrinkles or secret wisdom.  As far as I have experienced, the whole withholding tax situation for the real estate professionals is a pretty simple deal:

1. Does the IRS think you are important enough so they can make you pay if withholding gets bolloxed?
2. If you are personally on the hook, get the seller to sign the form that says he/she/it is a U. S. taxpayer and withholding doesn't apply.
3. If the seller doesn't sign the form, you make sure the 10% withholding is done and the money shipped off to the U. S. Treasure, on pain of maybe having to dig into your own wallet.

Point number 3 is where you are going to hear a lot of whining and 'splainin from your seller.  Stand firm.  Tell your seller to go get good advice from someone about this problem, and withhold anyway until proven to you that you don't have to.  

Your own wallet will thank you.  I know of a title company that goofed things up and had to send $75,000 to the IRS for the withholding tax that should have been taken, but wasn't.