Pay BillWritten by Stephen Von Hagel, CPA, CGMA, BMSS Member
In Summary:
Companies that paid certain IEEPA-related tariffs may now be eligible for refunds through CBP’s CAPE process. Business owners and finance leaders should review eligibility, gather key import and payment documentation, and evaluate the cash flow, accounting and tax implications of any refunds received.
Companies that paid certain tariffs imposed under the International Emergency Economic Powers Act (IEEPA) are beginning to receive refunds after the U.S. Supreme Court ruled that the administration exceeded its authority under the 1977 law. U.S. Customs and Border Protection (CBP) is processing refund requests through the Consolidated Administration and Processing of Entries, or CAPE, a new system designed to streamline IEEPA duty refunds.
For CFOs, controllers and business owners, this development may create an opportunity to recover meaningful cash flow. Reuters reported that, as of May 11, CBP had finalized refunds, including interest, totaling $35.46 billion across 8.3 million shipments after receiving 126,237 refund applications and validating 86,874 of them, covering 15.1 million entries. However, this number is only a partial refund for some filers. CNBC reported that companies, including Oshkosh Corporation and Basic Fun, had begun receiving initial refund payments, but noted the first payments represented only a portion of their total claims.
One important item to note is that eligibility is limited. Only the Importer of Record or an authorized customs broker that filed entries on behalf of the Importer of Record may submit a CAPE Declaration. Businesses should first determine whether they were the official importer listed on affected entries or whether a customs broker, carrier or logistics provider filed on their behalf.
To request a refund, eligible importers and authorized brokers must have an ACE Secure Data Portal account, provide bank account information through the portal and submit CAPE Declarations through the ACE Portal. The declaration is submitted using a CSV file and should consist of the list of entries for which IEEPA duty refunds are being requested with a limit of 9,999 entries, though multiple declarations may be filed.
If you believe you are due to receive a refund, your finance teams should gather entry numbers, Importer of Record details, broker information, liquidation status, duty payment records, documentation showing IEEPA-related duties paid and refund payment instructions. Businesses should also confirm whether refunds are payable to the Importer of Record or a designated party via CBP Form 4811 notify party. Once a CAPE Declaration is validated and accepted, ACE will update the relevant entry summary lines by removing the IEEPA Chapter 99 provision and corresponding duties.
Because of the large number of claims, timing may vary. CBP guidance says valid IEEPA refunds will generally be issued within 60 to 90 days after acceptance of the CAPE Declaration, unless compliance concerns or more complex entry scenarios require additional review. Phase 1 of CAPE is limited to certain unliquidated entries and certain entries within 80 days of liquidation.
Business owners and finance leaders should also evaluate the accounting, tax, cash flow and customer-pricing implications of any refund received.
How BMSS Can Help
If you have any questions about this process or how it may affect your business, BMSS can help review the potential financial, tax and reporting implications of tariff refunds and coordinate with legal counsel and other advisors as needed. Please reach out to your BMSS professional by calling (833) CPA-BMSS or visit our website for contact specific contact information.
Disclaimer: BMSS does not provide customs brokerage services or legal advice. Businesses should work with their customs broker and legal counsel to determine eligibility and submit refund documentation.
