IEEPA Tariff Refunds: What Businesses Need to Know

Businesses that paid tariffs under the International Emergency Economic Powers Act (IEEPA) may be able to recover those duties now that the Supreme Court invalidated the Act. That said, the refund process is complex and technical, making it difficult for businesses to navigate.

As US Customs and Border Protection (CBP) and lower courts continue rolling out guidance, importers are keeping a close eye on eligibility, documentation requirements, and deadlines.

Companies that rely on global supply chains could see a meaningful financial impact if they qualify for tariff refunds and know how to navigate ever-changing regulations. Keep reading to learn about the latest news and updates on IEEPA tariff refunds, common filing errors to avoid, and tax implications for qualifying businesses.

Where the IEEPA Refund Process Stands

CBP decided to process IEEPA refund claims in phases and is currently working through Phase 2. With each phase, eligibility, requirements, and procedures evolve.

CBP is processing IEEPA refund claims through a phased rollout using its new CAPE system. Phase 1 launched April 20, 2026, and covers unliquidated entries and entries within the 90-day voluntary reliquidation period. CBP has indicated that additional phases will address more complex scenarios, including reconciliation entries, drawback claims, and finally liquidated entries, but has not yet released full Phase 2 requirements.

As CBP works through claims and some backlogs, businesses can expect continued IEEPA tariff refund updates and shifting requirements. What worked in Phase I won't necessarily work now. As of late April 2026, importers and brokers had submitted approximately 75,300 CAPE declarations covering more than 11.2 million individual entries, of which roughly 1.74 million entries had cleared all validations.

Significant requirement changes mark the move from Phase 1 to Phase 2. IORs filing during this phase can expect:

• Expanded electronic filing procedures
• Additional verification requirements
• Further review of tariff classifications
• More detailed reconciliation standards
• Increased focus on deadlines

Why Claims Are Being Rejected

The majority of rejected IEEPA tariff refund claims are denied due to documentation gaps, classification errors, and/or missed procedural requirements. Phase II has much higher requirements for the technicalities of the refund process, and the smallest issue can trigger a delay or denial.

Some of the issues currently arising include:

• Incomplete entry documentation
• Incorrect Harmonized Tariff Schedule (HTS) classifications
• Missed deadlines
• Failure to reconcile customs records with refund filings
• Unsupported valuations
• Insufficient proof of applicability
• Duplicate or overlapping claims
• Missing supplier or importer records
• Inaccurate duty payment data
• Claims submitted under ineligible tariff lines

IORs planning to seek a refund under IEEPA must be informed and prepared for a rigorous process, with ever-changing requirements.

What Phase 2 Means for Businesses

While Phase 2 expanded eligibility to more IORs, it also introduced additional steps to go through. Phase 1 focused on narrower claims categories; Phase 2 broadened the scope of review, allowing businesses that were previously excluded to now apply.

Some key changes to be aware of include:

Importers with unresolved claims, businesses seeking amended filings, and organizations with large-volume import activity are all affected by Phase 2. Expect CBP officials to request additional materials, including tariff calculations, sourcing details, and payment histories.

This new focus requires organizations to enhance their recordkeeping, which can be difficult when relying on materials from suppliers. As with Phase 1, businesses must expect the process to continue evolving.

Businesses that were not listed as the Importer of Record may not be able to claim a refund directly from CBP, but they may still have opportunities to recover tariff-related costs from suppliers or other vendors that passed those costs along. In these situations, companies should review supplier agreements, invoices, tariff surcharge documentation, and related correspondence to determine whether any refund-sharing, price adjustment, or reimbursement rights may apply.

How Tariff Refunds Affect Your Taxes and Financial Reporting

How tariff refunds affect taxable income, cost accounting, and financial reporting depends on how a business recorded the original tariff fees.

It's not uncommon for business owners to dive headlong into recovering their IEEPA tariff refund without fully considering the implications of what a refund means for financial reporting. Reimbursements can create additional reporting considerations, making it important to review any refunds with a qualified accounting advisor.

Some of the factors that can affect how refunds impact taxes and financial reporting include:

• When the tariffs were paid
• If duties were included in inventory costs
• How similar expenses were previously recorded
• If financial statements have already been completed
• Amount of refund

As an example, businesses that include tariffs within COGS or inventory valuations may need to adjust their accounting, which has a ripple effect on margins, reporting, and prior financial statements.

Similarly, businesses that qualify for significant refunds may face broader tax planning implications. Working with an experienced advisor can help businesses correctly position themselves regardless of changing requirements.

What Businesses Should Do Right Now

By organizing import records and reviewing tariff classifications, businesses can get a jump start on the process and ensure they don't miss important deadlines.

Even if you aren’t sure whether your business will qualify for a tariff refund, you can begin an internal review and start getting paperwork in order. Waiting to get everything in place or assess historical documents means a longer lead time when it comes to applying.

Steps businesses can start taking right now include:

• Auditing historical import entries
• Reviewing HTS tariff classifications
• Confirming duty payment records
• Gathering invoices and customs documentation
• Reconciling customs filings with accounting records
• Identifying affected product categories
• Reviewing deadlines and appeal protocols
• Assessing financial reporting implications
• Monitoring for updates

It's also important to ensure current accounting systems appropriately track expenses related to importing and tariffs. Failing to do so can lead to issues during the refund review.

Whether working in construction, manufacturing, or non-profit settings, these industries commonly engage in international commerce more than others. Because of their expanded exposure, working with an experienced tax advisor is key.

These professionals spend their days understanding the latest IEEPA tariff refund requirements and guidance, making them invaluable during this highly technical process.

How Porte Brown Helps with Tariff Refund Planning

Porte Brown helps businesses of all sizes evaluate the financial, tax, and reporting implications related to tariff refunds.

As Phase 1 showed, getting a refund involves significantly more than simply submitting paperwork to CBP and waiting for a check to arrive. Even after being approved, businesses must also consider the tax implications and financial controls related to refunds.

All signs point to tariff guidance continuing to shift; taking a proactive approach to staying ahead of these changes reduces risk and maximizes the potential for a refund.

Learn more about how our Chicago tax accountants support refunding planning and financial reporting needs and how to apply for IEEPA tariff refunds. Get in touch today.