Printable Form 2026

IRS Form 5713 (Schedule B)

IRS Form 5713 (Schedule B) – If your business has international operations in or related to boycotting countries, understanding IRS Form 5713 Schedule B is essential for accurate tax reporting and avoiding penalties. This schedule helps U.S. taxpayers calculate the exact loss of tax benefits—such as foreign tax credits and income deferrals—when they participate in or cooperate with an international boycott under Section 999(c)(2) of the Internal Revenue Code.

In this comprehensive guide, we cover everything you need to know about Schedule B (Form 5713), including who must file it, step-by-step completion instructions, how it differs from Schedule A, and where to download the latest form. All information is based on official IRS sources as of 2026 (Form 5713 and schedules remain current with the September 2018 revision, per IRS.gov).

What Is IRS Form 5713 and Why Does Schedule B Matter?

Form 5713, International Boycott Report, requires U.S. persons to report:

  • Operations in or related to boycotting countries.
  • Receipt of boycott requests and agreements entered into.

The form enforces Section 999, which denies certain tax benefits to taxpayers who participate in or cooperate with unsanctioned international boycotts (primarily the Arab League boycott of Israel and related actions).

Schedule B (Form 5713) — titled Specifically Attributable Taxes and Income (Section 999(c)(2)) — is one of three key schedules attached to Form 5713. You use it when you choose to identify specifically attributable taxes and income tied directly to boycott operations instead of applying the overall international boycott factor (calculated on Schedule A).

Key purpose: It computes the precise amounts of:

  • Foreign taxes that become non-creditable.
  • Income (from CFCs, IC-DISCs, FSCs, etc.) that loses deferral or exemption benefits.

These amounts flow to Schedule C (Form 5713) to determine the final loss of tax benefits, which you then report on your main tax return (e.g., Forms 1116, 1118, 5471, 1120-IC-DISC).

When to use Schedule B instead of Schedule A:

  • Use Schedule B if you can specifically identify taxes and income tied to boycott operations (often preferred for accuracy and potentially lower disallowance).
  • You must use Schedule A for the extraterritorial income exclusion (if applicable, though largely repealed).
  • Partnerships may use a mix, but consistency within methods is required.

Who Must Complete Schedule B (Form 5713)?

You must complete Schedule B if both apply:

  1. You participated in or cooperated with an international boycott.
  2. You elect to figure the loss of tax benefits by specifically attributing taxes and income (rather than using the boycott factor on Schedule A).

Filers typically include:

  • U.S. persons (individuals, corporations, partnerships, trusts) with operations in boycotting countries.
  • Members of controlled groups where any member has such operations.
  • U.S. shareholders of foreign corporations (CFCs) with boycott operations.
  • Partners or trust owners with reportable operations.

Boycotting countries (current list as referenced in IRS instructions and Federal Register publications through 2025; always verify the latest quarterly list at FederalRegister.gov by searching “International Boycott”):

  • Iraq
  • Kuwait
  • Lebanon
  • Libya
  • Qatar
  • Saudi Arabia
  • Syria
  • United Arab Emirates
  • Yemen

Operations broadly include any business activity (sales, purchases, services, etc.) in, with, or related to these countries or their nationals.

Exceptions: U.S.-approved boycotts are not reported. Certain consolidated groups or foreign persons may qualify for waivers. Unsolicited bids need reporting only if accepted.

Note: Failure to file can result in penalties up to $25,000 and/or imprisonment for willful violations.

Step-by-Step Guide to Completing IRS Form 5713 Schedule B

Schedule B is a simple table: “Specifically Attributable Taxes and Income by Operation”. Use a separate Schedule B for each distinct boycott if you face multiple boycotts. Report only your own (or prorated shareholder) amounts—not those of other controlled group members.

Columns and Line-by-Line Instructions (Rev. September 2018)

The form features a table with up to 15 lines (a–o) plus a total row. For each boycott operation:

  • Column (1) – Name of country: Enter the boycotting country that requires the boycott as a condition of business. (Even if the operation occurs elsewhere, use the boycotting country’s name.)
  • Column (2) – Code: Enter the principal business activity code (from Instructions for Form 5713).
  • Column (3) – Description: Brief description of the principal activity. For IC-DISCs, include major product code in parentheses.
  • Column (4) – Foreign taxes attributable to boycott operations: Enter foreign taxes paid/accrued/deemed paid that are specifically tied to the boycott operation and thus ineligible for the foreign tax credit.
    Omit taxes already disallowed under sections 901–907, 911, or 6038.
    Total → Schedule C, line 2b.
  • Column (5) – Prorated share of international boycott income: Your share of CFC (or similar) income attributable to the boycott (including pre-repeal nonexempt FSC income). This income loses deferral.
    Deduct reasonable allocable expenses (including foreign taxes).
    Omit amounts already included under section 951 (except 952(a)(3)) or excluded by 952(b).
    Total → Schedule C, line 3b.
  • Column (6) – Taxable income attributable to boycott operations (IC-DISC): Shareholder’s prorated share of IC-DISC taxable income from boycott operations (loses deferral).
    Follow specific steps: Determine boycott portion from Form 1120-IC-DISC Schedule J, subtract pre-distribution amounts, then apply 16/17 multiplier if C corporation shareholder.
    Total → Schedule C, line 4b.
  • Column (7) – Taxable income attributable to boycott operations (FSC): Taxable income from FSC foreign trade income that would have been exempt but for the boycott.
    Total → Schedule C, line 5b.

Totals: Sum each column and carry to Schedule C. Attach to your income tax return (original only; do not sign the attached copy). File electronically or by mail with your return.

Download the official PDF:
IRS Form 5713 Schedule B (Rev. September 2018)

Full instructions are in the Instructions for Form 5713 (PDF).

How Schedule B Affects Your Taxes (Flow to Schedule C)?

Amounts from Schedule B reduce:

  • Foreign tax credit (section 908(a))
  • Subpart F deferral (section 952(a)(3))
  • IC-DISC income deferral
  • FSC foreign trade income exemption (pre-repeal rules)
  • Other benefits

These reductions appear on Schedule C and integrate into your primary tax forms, potentially increasing your U.S. tax liability.

Tips for Accurate Filing and Common Pitfalls

  • Choose your method wisely: Specifically attributable (Schedule B) often minimizes disallowance compared to the factor method but requires detailed records.
  • Documentation is key: Maintain evidence separating boycott vs. non-boycott operations. Presumption rules treat all operations in a boycotting country as boycott-related unless rebutted.
  • Controlled groups: One member can file for the group in some cases; otherwise, coordinate reporting.
  • Partnerships: Partnerships complete partial Schedules A/B; partners handle their own Schedule C.
  • Check for updates: Review the latest boycotting country list quarterly via Federal Register. No major form changes since 2018 as of 2026.
  • Consult a tax professional familiar with international tax and antiboycott rules—errors can trigger audits or penalties.

Frequently Asked Questions (FAQ)

  • What is Section 999(c)(2)?
    It allows (and requires reporting of) the specific attribution of taxes and income to boycott operations for computing lost tax benefits.
  • Do I need Schedule B if I have no boycott agreements?
    No—only if you participated/cooperated (via requests or agreements) and have operations triggering reporting.
  • Is the form still current in 2026?
    Yes. The IRS continues to use the September 2018 revision of Schedule B, with no new developments noted on the official About Form 5713 page (last reviewed January 2026).
  • Where do I find the current list of boycotting countries?
    Search “List of Countries Requiring Cooperation with an International Boycott” on FederalRegister.gov. The list has remained stable (9 countries) for years.
  • Can foreign persons file Schedule B?
    Generally no, unless they claim foreign tax credits, own IC-DISC stock, or have FSC income.

Final Thoughts

IRS Form 5713 Schedule B provides a precise, operation-by-operation approach to complying with international boycott tax rules under Section 999(c)(2). Proper use protects your foreign tax credits and deferrals while ensuring full IRS compliance.

For the most accurate filing:

  • Download directly from IRS.gov
  • Review the full Instructions for Form 5713
  • Visit the official About Form 5713 page for updates

Always consult a qualified tax advisor for your specific situation, as international tax rules involve complex interactions with controlled foreign corporations, IC-DISCs, and more.

This guide is for informational purposes only and is not tax or legal advice. Sources: Official IRS publications and forms (accessed February 2026).