Is Your Business Eligible for Tariff Refunds?

The U.S. Supreme Court recently ruled that certain tariffs imposed under the International Emergency Economic Powers Act (IEEPA) were illegal. As a result, U.S. Customs and Border Protection (CBP) has begun implementing a process to issue refunds to affected businesses. For some companies, this may provide an opportunity to recover cash from tariffs paid on imports over the past year.

CBP has launched the Consolidated Administration and Processing of Entries (CAPE) tool within its Automated Commercial Environment (ACE) portal to facilitate the refund process. According to federal court filings, CBP estimates that more than 300,000 importers paid approximately $166 billion in tariffs on over 53 million entries. But not all these tariffs will ultimately qualify for refunds.

Who Qualifies?

Eligibility generally applies to the “importer of record.” This term refers to the business entity that officially imported goods into the United States. In some cases, a customs broker that filed entries on behalf of a company may also play a role in the refund process.

If your business imports goods directly or uses a customs broker to handle import filings, there’s a strong possibility you may qualify for a refund. It’s important to note that consumers aren’t eligible for tariff refunds.

For qualifying companies, these refunds are more than just minor reimbursements — substantial dollar amounts may be at stake. Refunds can help boost cash flow and profitability. You also may need to adjust your recent financial statements or amend previously filed tax returns, depending on how tariffs were originally treated. For example, tariff refunds may affect taxable income, deductions and/or inventory accounting.

How Does the Refund Process Work?

Although CBP has introduced the CAPE tool to streamline claims, the process still requires careful coordination. Businesses should be prepared to:

• Identify affected import transactions,
• Gather supporting documentation, including entry filings and duty payments,
• Coordinate with customs brokers, if applicable, and
• Submit claims accurately through the CAPE tool.

In many cases, the customs broker who originally filed the entry may assist with tariff refunds. But companies shouldn’t assume the process is being handled automatically. A coordinated approach expedites claims processing. It also helps prevent incomplete or inaccurate filings, missed deadlines, overlooked financial reporting, and unanticipated tax consequences.

Next Steps

If your business imports goods, now’s the time to determine whether you’re eligible and, if so, begin preparing your claim. First, identify who’ll be responsible for filing your refund claim and gathering the required documentation. This person should promptly review your import activity during the affected period and reconcile import data to the general ledger to estimate the total potential refunds. Carefully review this documentation to identify missed entries or inconsistencies across multiple entities or systems. Proper substantiation is essential for obtaining CBP approval of your claim.

Also, be aware that CBP is currently processing refunds in phases. In Phase 1, CBP has said importers and customs brokers may file requests through the ACE portal by uploading a CAPE Declaration listing the relevant entry numbers. As a result, you should confirm whether your entry falls within the currently available phase.

Professional Guidance

Kirsch CPA Group can help you assess how the refund affects your financial statements and tax filings. We can guide you through the refund filing process to ensure you accurately capture the full opportunity — and comply with applicable reporting requirements.

Schedule an appointment to learn how we can support you

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