Recent legal developments have created a significant opportunity for U.S. importers to recover substantial cash through tariff refunds. Many businesses remain unaware of the steps required to secure these funds or the tax implications of receiving them. Both issues require attention now.
The Legal Background
On February 20, 2026, the U.S. Supreme Court held in Learning Resources, Inc. v. Trump that the International Emergency Economic Powers Act (IEEPA) does not authorize the President to impose tariffs. The decision effectively invalidated tariffs imposed under the IEEPA.
Judge Richard K. Eaton of the Court of International Trade is overseeing the refund process and ordered U.S. Customs and Border Protection (CBP) to establish a refund mechanism by April 20, 2026. The scale is significant. As of April 26, 2026, CBP reported:
- Over 75,000 Consolidated Administration and Processing of Entries (CAPE) declarations submitted
- Over 47,000 of those declarations passed file validations
- Over 11 million tariff entries are included, with more than 10% in the refund processing stages
- Refunds of approved declarations are expected to begin issuing by May 11, 2026
What This Means for Your Business
For mid-market businesses, this is a material liquidity opportunity. Companies that historically capitalized these costs into inventory or fixed assets may now recover them, often with interest. The refunds will not be automatic, however. Claims must be actively submitted through CBP’s CAPE system, and timely action is required.
The tax treatment of any refunds received will depend on how tariffs were previously accounted for, timing considerations for accrual-basis taxpayers, and any contractual obligations that require passing refunds through to customers. Each of these needs to be assessed before filing.
IEEEPA Tariff Refund Readiness Checklist
Use the following checklist to assess your organization’s readiness to pursue tariff refunds.
- Eligibility and Exposure Assessment: Identify applicable imports, quantify tariffs paid, estimate refunds, and confirm all entities are included.
- Data and Documentation Readiness: Gather import documentation, verify tariff codes, reconcile amounts, and organize supporting records.
- CBP Preparation: Confirm access to CBP’s Automated Commercial Environment (ACE) system, validate user permissions, ensure ACH details are up to date, and prepare for CAPE system use.
- Tax Treatment Analysis: Determine how tariffs were previously treated, evaluate taxability under IRC Section 111 (tax benefit rule), and assess impacts on inventory and fixed assets.
- Timing and Cash Flow Planning: Model income recognition timing and evaluate cash flow impacts of refunds across reporting periods.
- Contractual Considerations: Review customer contracts and determine any obligations to pass refunds through to customers.
- Internal Coordination: Assign responsibilities, set timelines, and coordinate with outside advisors.
- Filing and Compliance: Prepare and submit claims, track status, and maintain all supporting documentation.
- Financial Reporting: Evaluate the accounting treatment of refunds and applicable disclosure requirements.
- Ongoing Monitoring: Track regulatory updates and IRS guidance as the refund process continues to develop.
How SingerLewak Can Help
SingerLewak LLP provides end-to-end support for businesses pursuing IEEEPA tariff refunds, including claim quantification, filing assistance, tax treatment analysis, and strategic advisory services. Our goal is to help clients maximize recovery while managing the compliance and tax risks that come with it.
The trade environment continues to shift. Regulations, tariffs, and court decisions can move quickly, and the window to act on opportunities like this one does not stay open indefinitely. Our International Tax team is available to help you assess your exposure, prepare your filings, and work through the tax implications before they become surprises.
Contact our International Tax team
- Robin Park | [email protected]
- Stephen Bolt | [email protected]
- Lipi Choudhury | [email protected]
- Daniel Sheinfeld | [email protected]
Contact: www.singerlewak.com
