Tax & Customs
IRS Bond
A bond the Internal Revenue Service may require when it lets a taxpayer pay a tax over time.
- Required by
- Internal Revenue Service
- Bond amount
- Set by whoever requires the bond. We confirm it.
What this bond guarantees
The bond promises the IRS that the taxpayer will pay the extended tax on the terms of the extension. Under 26 U.S.C. 6165, the IRS may require a bond of up to double the extended amount. If the taxpayer misses the payments, the IRS collects from the surety.
Who needs it
- Estates paying estate tax in installments
- Taxpayers granted an extension of time to pay
- Businesses the IRS requires to secure a tax liability
What the underwriter looks at
- Size of the tax owed
- Financial strength of the taxpayer or estate
- Collateral available
- Length of the payment period
Requirements vary by state and by who asks for the bond. Send us the request you received and we will confirm exactly what it calls for.
Common questions
How much bond can the IRS require?
Up to double the amount of tax being extended, under 26 U.S.C. 6165.
Can any surety write it?
Federal bonds must come from a surety on the Treasury's list of approved companies (Circular 570). We place IRS bonds with those companies.
Is collateral required?
Often, because the bond backs a known tax debt. The surety decides based on the taxpayer's finances.