Printable Form 2026

IRS Form 1117 – Income Tax Surety Bond

IRS Form 1117 – Income Tax Surety Bond – If you or your domestic corporation claims a foreign tax credit (FTC) under IRC Section 901 for taxes accrued but not yet paid to a foreign country or U.S. possession, the IRS may require you to post a bond using IRS Form 1117 (Income Tax Surety Bond) before allowing the credit. This little-known but critical form protects the U.S. government against potential underpayment if the actual foreign tax paid (or refunded) differs from the accrued amount claimed on your return.

Form 1117 remains the current official form as of 2026 (Revision Date: January 1981, last posted by IRS on November 13, 2013). It is still actively referenced in the latest IRS publications and instructions.

Download the official IRS Form 1117 PDF here: https://www.irs.gov/pub/irs-pdf/f1117.pdf

What Is IRS Form 1117?

IRS Form 1117 is a one-page surety bond document titled “Income Tax Surety Bond”. It applies specifically to foreign taxes reported as a credit by an individual (via Form 1116) or a domestic corporation (via Form 1118) under Section 901 of the Internal Revenue Code.

The bond guarantees that if the foreign tax you accrued and claimed as a credit turns out to be lower than reported (or is refunded), you will pay any additional U.S. tax due plus interest upon IRS demand. It is required only when the IRS determines it is necessary as a condition of allowing the credit for accrued but unpaid foreign taxes.

Key legal basis:

  • IRC Section 905(c) — Requires notification and redetermination of U.S. tax if accrued foreign taxes differ from amounts ultimately paid or refunded.
  • Treasury Regulations Section 1.905-2(c) — Authorizes the IRS to require the bond before allowing the credit.

Who Needs IRS Form 1117 and When Is It Required?

You (or your corporation) may need Form 1117 if:

  • You file Form 1116 (Foreign Tax Credit — Individuals) or Form 1118 (Foreign Tax Credit — Corporations).
  • You claim a credit for foreign income, war profits, or excess profits taxes that have accrued but not yet been paid to a foreign country or U.S. possession.
  • The IRS (formerly referred to as the “District Director” on the form) specifically requires the bond before approving the credit.

Publication 514 (2025), Foreign Tax Credit for Individuals states: “If you claim a credit for taxes accrued but not paid, you may have to post an income tax bond to guarantee your payment of any tax due in the event the amount of foreign tax paid differs from the amount claimed. The IRS can request this bond at any time without regard to the time limit on tax assessment.”

Instructions for Form 1118 (Rev. December 2025) explicitly note: “If the corporation claims a foreign tax credit for tax accrued but not paid, the IRS may require a bond to be furnished on Form 1117, Income Tax Surety Bond, before the credit is allowed. See Regulations section 1.905-2(c).”

Note: The bond is not automatically required with every FTC claim. It is requested on a case-by-case basis, typically for larger or higher-risk accrued credits.

How to Complete and File IRS Form 1117 (Step-by-Step)?

Form 1117 is straightforward but must be executed properly with a qualified surety (usually a licensed bonding or insurance company).

  1. Enter the tax year — Specify the calendar year or fiscal year (month and year beginning and ending).
  2. Principal information — Name of the individual or domestic corporation (the taxpayer).
  3. Surety information — Name and address of the surety company (or sureties).
  4. Bond amount — Exact dollar amount specified by the IRS (this is not chosen by the taxpayer).
  5. Signatures —
    • Principal (taxpayer) signs.
    • Surety(ies) sign.
    • Witness signatures.
    • IRS approval signature (District Director or authorized IRS official).
  6. Conditions of the bond — The form includes standard language tying the bond to Section 905(c) redeterminations.

The completed bond must be submitted to the IRS as directed (usually with or in response to the Form 1116/1118 filing or upon specific IRS request).

Important: The surety must be satisfactory to the IRS. Corporate sureties are typically used; personal sureties are rarely accepted.

Common Situations Triggering a Potential IRS Form 1117 Requirement

  • Large accrued foreign tax credits from foreign subsidiaries or operations where payment is delayed.
  • Cash-basis taxpayers who elect to claim credits on the accrual basis (irrevocable election on Form 1116 or 1118).
  • Situations where foreign tax redeterminations under Section 905(c) are likely (e.g., ongoing foreign audits, contested liabilities, or currency fluctuations).

Penalties and Consequences of Not Providing the Bond (If Required)

If the IRS requires Form 1117 and you do not provide it:

  • The foreign tax credit for the accrued but unpaid taxes will not be allowed.
  • You may face additional U.S. tax liability, interest, and possible penalties.
  • Failure to notify the IRS of a foreign tax redetermination can trigger further adjustments and penalties.

Related Forms and Resources (2025–2026 Tax Year)

  • Form 1116 — Foreign Tax Credit (Individuals)
  • Form 1118 — Foreign Tax Credit (Corporations)
  • Publication 514 — Foreign Tax Credit for Individuals (2025)
  • Instructions for Form 1118 (Rev. December 2025)
  • Treasury Regulations §1.905-2

Official IRS Download Link (Form 1117): https://www.irs.gov/pub/irs-pdf/f1117.pdf

Frequently Asked Questions About IRS Form 1117

  • Is Form 1117 still required in 2026?
    Yes. The form has not been updated or obsoleted. It continues to be listed on IRS.gov and referenced in current-year instructions and Publication 514.
  • Can I file Form 1117 electronically?
    No. It is a physical surety bond that must be signed and submitted on paper with a qualified surety.
  • How much does the bond cost?
    Premiums are set by the surety company and typically based on the bond amount and your creditworthiness (often 1–3% or more of the bond face value annually, depending on the surety).
  • Do I need a lawyer or tax professional?
    Highly recommended. Working with a CPA or tax attorney experienced in international tax and a licensed surety is the safest way to comply.

Final Thoughts

While IRS Form 1117 is rarely needed for routine foreign tax credit claims, it serves as an important safeguard for the IRS when taxpayers claim credits for large accrued but unpaid foreign taxes. Understanding when it may be required—and being prepared to provide it promptly—can prevent delays or disallowance of valuable foreign tax credits.

Always consult a qualified tax professional for your specific situation, as international tax rules (including FTC regulations updated in 2022 and subsequent notices) can be complex. For the most current guidance, visit the official IRS forms and instructions pages.

Sources (all accessed February 2026):

  • IRS.gov official Form 1117 PDF
  • Instructions for Form 1118 (Rev. December 2025)
  • Publication 514 (2025), Foreign Tax Credit for Individuals
  • Treasury Regulations §1.905-2

Stay compliant and maximize your legitimate foreign tax credits—download Form 1117 today and consult your tax advisor if you claim accrued foreign taxes.