Key insights
- IEEPA tariffs have been ruled unlawful and collections have stopped, but the broader tariff environment remains fluid as replacement tariffs and new trade actions emerge.
- Refunds are expected, but they won’t be automatic — U.S. Customs and Border Protection is rolling out a new electronic refund process, with the first phase scheduled to deploy on April 20, 2026, and importers must take affirmative steps to participate.
- Refunds will be administered through a centralized system and may be issued in stages over time, rather than entry by entry.
- Companies should plan for interest on refunds, along with related accounting, tax, and transfer‑pricing considerations.
Get help with tariff refunds, including tax considerations.
Important links
New ACE portal top account applications:
Importer sub-account — Importer Application
Exporter sub-account — Exporter Application
Protest filer sub-account — Protest Filer Application
All other sub-accounts — New ACE Portal Application
Tariffs have been a major cost — and headache — for importers in recent times.
The rules changed frequently and they have again: Tariffs imposed under the International Emergency Economic Powers Act (IEEPA) have been ruled unlawful, and collections have stopped.
For importers who paid IEEPA tariffs, refunds are expected. U.S. Customs and Border Protection (CBP) has outlined how those refunds will be administered through a new, centralized process in its Automated Commercial Environment (ACE).
What is the current status of IEEPA tariff refunds?
The government has stopped collecting IEEPA‑related tariffs, and the U.S. Court of International Trade ordered refunds for importers of record. However, refunds aren’t being processed immediately.
CBP confirmed refunds will be administered through a centralized, electronic process within ACE, rather than through manual or entry‑by‑entry action. To support this approach, CBP is deploying a new system — the Consolidated Administration and Processing of Entries (CAPE) — to manage refund claims at scale.
The court has temporarily paused immediate compliance to allow CBP time to implement this system. As a result, refunds are expected to roll out in stages, with the first phase scheduled to deploy on April 20, 2026.
Will tariff refunds be issued automatically?
No. Refunds will be issued electronically through ACE using CBP’s new CAPE system, and importers must be properly registered with electronic (ACH) payment information on file. Importers that haven’t completed this setup may experience delays.
What tariff refund process is CBP developing?
CBP is developing a centralized refund process within ACE called the Consolidated Administration and Processing of Entries (CAPE). CAPE is designed to administer IEEPA tariff refunds through a centralized workflow that includes:
- Electronic claim submission
- Mass recalculation of duties without IEEPA tariffs
- Liquidation or reliquidation review
- Electronic refund issuance
CBP says different system components are being deployed in phases, with additional functionality added over time.
When are tariff refunds expected to begin?
Core refund functionality will be deployed in phases as the new CAPE system comes online. Refunds are expected to begin only after the relevant system components are operational and claims can be processed through ACE.
Even once refund processing begins, importers should expect payments to roll out over time rather than immediately. Refunds may be issued in stages and could extend over several months, depending on system readiness, claim volume, and the status of liquidation or reliquidation for individual entries.
Which entries are eligible for tariff refunds?
On March 27, 2026, the Court of International Trade further amended its order to clarify U.S. Customs and Border Protection must liquidate or reliquidate all entries subject to IEEPA duties without regard to those duties, including entries that were previously finally liquidated. However, the court continues to suspend the order to the extent it would require immediate compliance.
In practical terms, this means the court has confirmed refunds should ultimately be available even for older, already closed import entries, but Customs doesn’t have to begin issuing refunds yet.
For the latest on the Trump administration’s tariffs, how they may impact your organization, and what you can do to mitigate risk, read our comprehensive tariff analysis.
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IEEPA tariff refunds frequently asked questions (FAQs)
What you think you owe may be different from what CBP thinks you owe. Importers — as the importer of record — are responsible for the initial determination of duties paid on an estimated basis when goods enter the United States. CBP subsequently reviews the entry, including tariff classification, customs value, country of origin, and any applicable exclusions.
Liquidation is the point at which CBP makes its final determination of the duties, taxes, and fees owed on an import entry. Liquidation formally closes the entry unless a timely protest is filed, by confirming the final duty amount.
After liquidation, one of three things may occur:
- No additional duties are owed
- An overpayment results in a refund
- CBP assesses additional duties due
Once CBP liquidates an import entry, the importer has 180 days from the date of liquidation to file a formal protest challenging CBP’s decision. If no protest is filed within that 180-day period, CBP’s decision becomes final and legally binding.
CLA recommends importers work closely with their licensed customs brokers who handled the initial import documentation to assist with refund requests.
Yes. The court ruled refunds of unlawfully collected IEEPA duties should include interest. Interest continues to accrue while refunds are delayed, which may materially increase the total recovery for some importers.
Importers should:
- Confirm ACE portal access and enrollment in electronic (ACH) refunds
- Identify entries on which IEEPA tariffs were paid
- Coordinate with customs brokers to compile entry-level data
- Closely monitor CBP and court updates
Failure to complete electronic refund setup may delay or prevent payment.
Potential tax and accounting impacts of tariff refunds
Expected tariff refunds generally represent gain contingencies and aren’t recorded until realization or realizability is established. However, companies may need to evaluate disclosure obligations if expected refunds are material. Timing mismatches between customs refunds and financial reporting periods may also affect earnings and cash-flow forecasts.
Often, yes. If IEEPA tariffs were previously deducted through cost of goods sold or capitalized into inventory, a refund generally results in taxable income when received.
The specific tax treatment depends on how the tariffs were originally treated for tax purposes and whether inventory has already been sold. Companies should model the timing impact, particularly where refunds are received in a different tax year than the original deduction.
If tariffs were included in inventory costs, a refund received after the inventory has been sold generally results in income rather than an adjustment to current-period cost of goods sold. If inventory remains on hand at the time of refund, an adjustment to inventory basis may be required. The facts and refund timing relative to inventory disposition are critical.
Yes. Many states conform to federal taxable income, meaning tariff refunds may also be taxable for state income tax purposes. In addition, some states impose sales or use taxes on purchase prices including tariffs. Companies should evaluate whether state or local tax refunds are available or whether prior overpayments remain unrecoverable.
They can. Refunds are paid to the importer of record, which may not be the entity that ultimately bore the economic cost of the tariffs within a multinational group. This disconnect can require transfer pricing adjustments, true-ups, or policy revisions to align outcomes with arm’s-length principles.
In a merger and acquisition or other deal context, expected or potential IEEPA tariff refunds are generally not treated as earnings or EBITDA normalization items. Because refunds remain contingent, uncertain in timing, and subject to administrative and procedural risk, they’re typically excluded from EBITDA adjustments in a quality of earnings (QofE) analysis. Instead, disclose and quantify historical IEEPA tariffs incurred in the QofE as a non-recurring cost exposure, without assuming recovery.
Any potential refunds are more appropriately treated as contingent upside and addressed through transaction structuring mechanisms — such as purchase price adjustments, indemnities, escrows, or specific refund-sharing provisions in the stock purchase agreement — rather than through historical earnings normalization.
This approach preserves the integrity of historical EBITDA, helps avoid embedding contingent gains into valuation metrics, and allows buyers and sellers to separately negotiate the economic allocation of future refund proceeds based on risk tolerance and deal dynamics.
Some importers are exploring transactions to monetize expected refunds in exchange for upfront cash. While this may improve liquidity, it typically involves a discount to the expected recovery and may raise legal, accounting, and tax issues that should be carefully evaluated.
Yes. In certain industries, downstream customers or consumers may assert claims to tariff refunds, particularly where tariffs were passed through in pricing. Companies should consider contractual, commercial, and litigation risks before assuming refunds can be retained without challenge.
What is the broader tariff landscape going forward?
Although IEEPA tariffs were invalidated, the administration has already imposed replacement tariffs under other statutory authorities and initiated additional trade investigations. As a result, tariff exposure hasn’t disappeared, and refund planning should be coordinated with ongoing trade compliance and supply-chain strategy.
How CLA can help with IEEPA tariff refunds
CLA recommends importers of record work with directly with their customs brokers for assistance with filing tariff refund claims and navigating the CBP refund process. Customs brokers are well positioned to support the technical and procedural aspects of refund submissions through ACE.
CLA can help with accounting and tax issues connected to tariff refunds, including tax modeling, SALT considerations, cost of goods sold inventory rules, and transfer pricing issues. Contact our tax team for personalized assistance.
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