Introduction: What Is IRS Form 5713?

IRS Form 5713, titled International Boycott Report, is an official international tax compliance return published by the Internal Revenue Service (IRS) and the Department of the Treasury. It is governed by Section 999 of the Internal Revenue Code (IRC) and Treasury Regulation Section 7.999-1.

This form is used by U.S. citizens, resident aliens, domestic corporations, partnerships, estates, and trusts—as well as foreign corporations with U.S. ownership—to report business operations in or related to countries that sponsor unsanctioned international economic boycotts. It is also used to disclose any formal or informal requests received to participate in a boycott.

Enacted as part of the Tax Reform Act of 1976, Form 5713 enforces U.S. anti-boycott policy by discouraging American businesses from cooperating with unauthorized foreign trade boycotts (such as the Arab League boycott of Israel) through the threat of criminal penalties and the loss of major tax incentives.

Purpose of the Form

The United States government prohibits U.S. taxpayers from participating in or cooperating with unsanctioned foreign boycotts against countries friendly to the U.S. Form 5713 serves a vital two-pronged purpose in enforcing this policy:

Mandatory Disclosure & Transparency: It requires taxpayers to report all business operations conducted in boycotting countries and disclose every boycott-related request received (such as restrictive clauses in commercial contracts or letters of credit), even if the taxpayer refused the request.
Tax Benefit Disallowance: If a taxpayer actually agrees to participate in or cooperate with an unsanctioned boycott, Form 5713 triggers the denial of three valuable federal tax benefits: the Foreign Tax Credit (IRC Section 908), tax deferral on Controlled Foreign Corporation earnings under Subpart F (IRC Section 952(a)(3)), and IC-DISC export benefits (IRC Section 995(b)(1)(F)(ii)).

Form 5713 functions as the master reporting return that connects with Schedule A (Boycott Factor), Schedule B (Specifically Attributable Method), and Schedule C (Tax Effect Computations) to calculate and apply these penalties.

Who Needs to File This Form

You are legally required to file Form 5713 if you are a U.S. person or foreign entity with U.S. connections and meet any of the following statutory filing triggers during the tax year:

Operations in Listed Boycotting Countries: You conducted business operations directly in, with, or related to a country on the Department of the Treasury’s published quarterly boycott list (such as Iraq, Kuwait, Lebanon, Libya, Qatar, Saudi Arabia, Syria, and Yemen).
Operations in Other Boycotting Nations: You conducted operations in any non-listed foreign country that you know or have reason to know requires boycott participation as a condition of doing business.
Controlled Corporate Groups: You are a member of a controlled group of corporations in which any member had operations in or related to a boycotting country.
10% Shareholders of Foreign Corporations: You are a 10% or greater U.S. shareholder of a foreign corporation that had operations in or related to a boycotting nation.
Partnerships & Trusts: You are a partner in a partnership or a beneficiary of a trust that engaged in operations in or related to a boycotting country.
Receipt of a Boycott Request: You, or an entity you control, received a request to participate in or cooperate with an international boycott (even if you rejected the request).

Who Is Exempt / Not Required to File

Many taxpayers and business entities are exempt from filing Form 5713. You do not need to submit this form if you meet the following conditions:

No Foreign or Boycott Operations: U.S. individuals and domestic companies that have no foreign operations and conduct no business in or related to boycotting nations.
Unrelated Foreign Trade: Businesses operating internationally in countries that do not sponsor unsanctioned boycotts and where no boycott requests were received.
Bona Fide Residents with No Tax Benefit Claims: U.S. citizens who are bona fide residents of a boycotting country whose foreign operations are entirely local and who claim no Foreign Tax Credits, Subpart F deferrals, or IC-DISC benefits.
Incidental Personal Travel: Individual taxpayers traveling through boycotting countries strictly for personal tourism without conducting commercial business or signing trade agreements.

When to File

Form 5713 is an annual information return that shares the same statutory due date as your primary federal income tax return:

Individual Filers (Form 1040): Due by April 15th (or October 15th with an automatic extension via Form 4868). U.S. expats living abroad receive an automatic extension to June 15th.
Corporate Filers (Form 1120): Due by the 15th day of the 4th month following the close of the corporate tax year (typically April 15th for calendar-year filers, or October 15th on extension via Form 7004).
Partnership Filers (Form 1065): Due by the 15th day of the 3rd month (typically March 15th, or September 15th on extension).

Where and How to File

Form 5713 is subject to a strict duplicate filing requirement under IRS Treasury regulations:

Attached to Your Tax Return: File Form 5713 and any required schedules (A, B, or C) directly with your annual federal income tax return (Form 1040, 1120, 1065, or 1120-IC-DISC) through your regular electronic or paper filing method.
Mandatory Duplicate Copy to IRS Ogden: You must mail a separate duplicate copy of Form 5713 and all attached schedules directly to the dedicated IRS processing center address as per the official Form 5713 instructions (Internal Revenue Service Center, Ogden, UT).

Step-by-Step Instructions to Fill Form 5713

Form 5713 is a comprehensive 4-page return covering taxpayer identity, corporate group affiliations, country-by-country operations, boycott requests, and agreements.

Section / Lines	Key Focus Areas	What to Enter / Disclose
Header Section	Identity & Filer Type	Enter your legal name, mailing address, federal Taxpayer Identification Number (EIN or SSN), tax year-end date, and check your entity classification.
Lines 1 – 6	Controlled Group & Ownership	Disclose whether you are a member of a controlled corporate group, identify the common parent company, and report ownership in partnerships or foreign corporations.
Line 7	Country-by-Country Operations	List every boycotting country in or related to which you, your controlled group, or your foreign affiliates conducted business operations during the tax year.
Line 8	Boycott Requests Received	Report all requests received to participate in or cooperate with a boycott (categorized by request type: refusal to do business, discriminatory employment, shipping/insurance restrictions), even if rejected.
Line 9	Boycott Agreements	Report whether you actually entered into an agreement to participate in or cooperate with an international boycott during the tax year.
Lines 10 – 13	Loss of Tax Benefits Method	If you answered “Yes” on Line 9, indicate whether you are computing the loss of tax benefits using the Schedule A Factor Method or the Schedule B Specific Attribution Method, and attach Schedule C.
Signatures	Legal Certification	An authorized individual, corporate officer, or general partner signs and dates the return under penalties of perjury.

Understanding Reportable Boycott Requests (Line 8)

A critical trap for taxpayers is Line 8. You must disclose every instance where your business received a boycott request—such as a tender document requiring a certification that goods contain no Israeli-origin parts, or a shipping document barring Israeli vessels. You must report these requests even if you refused to comply.

Reporting Agreements vs. Computing Tax Penalties (Lines 9 – 13)

Merely conducting business in a boycotting country or receiving an unaccepted request does not trigger tax penalties. Tax penalties apply only if you answer “Yes” on Line 9, confirming that your business entered into an agreement to cooperate with the boycott. Answering “Yes” requires attaching Schedule A or Schedule B, along with Schedule C.

Required Documents and Information Needed Before Filling

Before completing Form 5713, assemble the following international commercial and accounting records:

Treasury Department Boycott List: The official quarterly list of boycotting nations published in the Federal Register.
Commercial Contracts & Tender Documents: International sales contracts, purchase orders, letters of credit, and shipping invoices containing foreign compliance clauses.
Global Country-by-Country Ledgers: Accounting records detailing gross receipts, purchases, and payroll categorized by foreign country.
Controlled Group Organizational Charts: Corporate entity charts showing all domestic and foreign affiliates belonging to your corporate group.
Completed Schedules A, B, and C (if applicable): Computational schedules if your business cooperated with boycott operations.

Common Mistakes to Avoid

Failing to Report Rejected Boycott Requests: Assuming that because you rejected a boycott clause in a contract, you do not need to file Form 5713. Receiving a request is an automatic filing trigger on Line 8.
Omitting Controlled Group Members: Filing only for the U.S. parent company while failing to report operations conducted by foreign subsidiaries or sister corporations.
Forgetting the Duplicate Mailing: Failing to send a separate copy of Form 5713 directly to the IRS Service Center in Ogden, Utah.
Confusing IRS and Commerce Department Rules: Confusing IRS Form 5713 (IRC Section 999) with the Department of Commerce’s Bureau of Industry and Security (BIS) anti-boycott reporting forms. These are separate legal requirements under different federal statutes.
Missing Required Schedules: Reporting boycott agreements on Line 9 without attaching Schedule A or B and Schedule C to compute the tax impact.

Penalties and Compliance Risks

The federal government enforces international boycott reporting with both criminal sanctions and severe civil tax penalties:

Criminal Penalties for Willful Failure to File: Under IRC Section 999(f), any person who willfully fails to file Form 5713 (or fails to disclose required boycott requests) is guilty of a misdemeanor and, upon conviction, may be fined up to $25,000, imprisoned for up to 1 year, or both.
Loss of Foreign Tax Credits: Under Section 908, a portion or all of your allowable foreign tax credits on Form 1118 or Form 1116 are permanently disallowed.
Immediate Taxation of Foreign Earnings: Under Section 952(a)(3), CFC earnings tied to boycott operations lose tax deferral and become immediately taxable as Subpart F income on Form 5471.
Loss of IC-DISC Export Benefits: Under Section 995(b)(1)(F)(ii), export tax deferral benefits for IC-DISC entities are proportionately disallowed.
20% Accuracy-Related Penalties: Understating federal income tax liabilities by failing to apply boycott adjustments triggers a 20% penalty under IRC Section 6662.

Related Forms and Schedules

When completing Form 5713, international corporate tax teams coordinate with these related IRS schedules and forms:

Schedule A (Form 5713): International Boycott Factor (formula method).
Schedule B (Form 5713): Specifically Attributable Taxes and Income (specific allocation method).
Schedule C (Form 5713): Tax Effect of the International Boycott Provisions (computational master schedule).
Form 1118: Foreign Tax Credit—Corporations (where Section 908 credit reductions are applied).
Form 1116: Foreign Tax Credit—Individual.
Form 5471: Information Return of U.S. Persons With Respect to Certain Foreign Corporations.
Form 1120-IC-DISC: Interest Charge Domestic International Sales Corporation Return.

Frequently Asked Questions (FAQs)

1. What is the difference between reporting a boycott request and participating in a boycott?

Reporting a request means disclosing that a foreign buyer, bank, or government asked you to participate in a boycott (which is mandatory on Line 8). Participating in a boycott means you actually agreed to comply with the request (which triggers the loss of tax benefits on Line 9 and Schedules A/B/C).

2. Which countries are on the Treasury Department’s official boycott list?

The Treasury Department publishes an updated list quarterly. Currently listed nations typically include Iraq, Kuwait, Lebanon, Libya, Qatar, Saudi Arabia, Syria, and Yemen.

3. Do I have to file Form 5713 if my company only received a request in a contract and refused it?

Yes. If you conducted business in a listed country or received a boycott request, you must file Form 5713 to report the request on Line 8, even if you refused to sign the clause and rejected the request.

4. What is the difference between IRS Form 5713 and Commerce Department reporting?

IRS Form 5713 is a tax return under IRC Section 999 that denies tax benefits and imposes criminal penalties for non-filing. The Department of Commerce’s Bureau of Industry and Security (BIS) enforces the Export Administration Regulations (EAR), which makes complying with certain boycott requests illegal under civil and criminal law.

5. Why must Form 5713 be mailed in duplicate to Ogden, Utah?

IRS regulations require a dedicated duplicate copy sent to the IRS Ogden Service Center so that specialized international boycott compliance examiners can review cross-border trade disclosures separately from your primary tax return processing.

6. What tax benefits are lost if my company participates in a boycott?

Participating in an unsanctioned boycott results in the reduction of your Foreign Tax Credits (Section 908), loss of tax deferral on foreign subsidiary earnings under Subpart F (Section 952(a)(3)), and reduction of IC-DISC export tax benefits (Section 995(b)(1)(F)(ii)).

Conclusion

IRS Form 5713 is a vital international compliance return that enforces U.S. foreign policy and anti-boycott regulations. By requiring full disclosure of business operations in boycotting countries and all boycott requests received, Form 5713 ensures complete transparency across cross-border trade.

To avoid criminal prosecution under Section 999(f) and significant civil tax disallowances, multinational businesses must screen international commercial contracts for boycott language, report all requests accurately on Line 8, attach required Schedules A, B, and C if participation occurred, and fulfill the mandatory duplicate filing to the IRS Ogden Center on time.

IRS Form 5713 Guide: International Boycott Report Rules