For many U.S. importers, the invalidation of tariffs imposed under the International Emergency Economic Powers Act (IEEPA) represents a rare opportunity to recover substantial cash with interest. But the refund opportunity is not automatic.
U.S. Customs and Border Protection (CBP) is actively issuing tariff refunds following the Supreme Court’s decision, and while billions of dollars are owed back to importers, the process has proven complex, highly technical, and unforgiving of errors. It’s not too late to apply via CBP’s Automated Commercial Environment (ACE) portal. The CBIZ tariff solution team can help you apply, avoid common pitfalls, and plan for the U.S. federal income tax and accounting treatment of tariff refunds.
Status
CBP launched Phase 1 of its mass refund initiative through the CAPE system on April 20. CAPE is a new administrative system where importers submit claims for electronic ACH refunds. Importers must proactively submit refund declarations—there is no automatic reimbursement.
Key developments importers should be aware of include:
- The federal government owes importers an estimated $166 billion plus interest in IEEPA-related refunds.
- Refund eligibility in Phase 1 is limited to entries that remained unliquidated or were liquidated within a narrow window.
- CBP has already issued multiple progress reports, underscoring the scale and scrutiny of the process.
Again, participation is not optional for those seeking refunds. Importers must complete detailed filings, ensure data accuracy, and respond to validation requirements to recover funds that were unlawfully collected.
Filing Trends: Momentum Is Building
Activity within the CAPE system continues to accelerate, signaling that many importers recognize the urgency. As of early May:
- Roughly half of importers of record have already submitted refund declarations.
- CBP has received more than 126,000 filings, with nearly 69% validated.
- Thousands of claims remain under review, correction, or resubmission.
While validation rates are encouraging, they mask a more concerning trend: a meaningful percentage of claims are being rejected outright.
Pain Points: Why Claims Are Being Rejected
Despite careful preparation by many filers, rejection rates currently range from 15% to 19%, according to CBP. In most cases, these denials stem from preventable issues rather than as a result of ineligibility.
Common rejection drivers include:
- Timeframe errors, particularly filings that fall outside Phase 1 eligibility parameters
- Importer-of-record confusion, including mismatches between historical entries and current filer data
- Formatting errors or incomplete information, which can trigger automatic system failures
- Missing electronic payment details, preventing CBP from issuing approved refunds
These issues highlight a critical reality: even approved refunds can be delayed if administrative steps, such as registering electronic payment accounts, are overlooked.
What to Expect Next: Continued Uncertainty
The refund landscape remains fluid. The Administration has a limited window to appeal the court’s order, which could suspend the process and significantly delay refund payments. At the same time, Congress may introduce legislation that alters refund timing or mechanics.
Looking ahead, importers should also prepare for Phase 2, which is expected to address more complex and previously excluded entries, including:
- Final liquidated entries outside voluntary reliquidation periods
- Entries where administrative protests have been filed
- Mixed-duty entries combining IEEPA tariffs with other trade remedies
CBP has not announced a deployment date for Phase 2, making early preparation essential rather than optional.
How CBIZ Can Help
Navigating the IEEPA tariff refund process requires more than data entry—it demands coordination across trade, tax, and accounting functions. CBIZ is here to help guide you through refund process, avoid common pitfalls, and plan for tax and accounting consequences.
Please see our recent insights on how CBIZ can help companies assess potential tariff refunds and prepare for the related tax, accounting, and compliance consideration.
CBIZ works with importers to help them:
- Assess refund eligibility across current and future phases
- Prepare and validate CBP filings to reduce rejection risk
- Address importer-of-record and documentation challenges
- Plan for U.S. federal income tax treatment of tariff refunds
The bottom line: The refund process is underway, but it is complex and subject to error. Companies that act now, with the right support, are best positioned to recover what they are owed and plan confidently for what comes next.
Contact our tariffs and trade team at solutions team at DLTariffs&[email protected] for assistance with your tariff refunds claim.
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