New Procedures for Tariff Refunds

The Supreme Court’s Feb. 20, 2026, decision that IEEPA does not authorize presidential tariff authority has quickly reshaped the U.S. trade landscape. Following the ruling, U.S. Customs and Border Protection (CBP) stopped collecting IEEPA duties and began developing a framework to address the large number of import entries affected by those tariffs. At the same time, policymakers introduced alternative trade measures, including a temporary tariff under Section 122.

Background

IEEPA historically has granted the president authority to regulate certain economic transactions during national emergencies. In recent years, however, the statute also was used as the legal basis for tariff measures imposed on imports from specific countries. These measures included reciprocal tariffs with a baseline rate of 10% and country-specific rates ranging from 10% to 50%, as well as tariffs related to fentanyl-related trade measures involving China.

The legality of using IEEPA to impose tariffs was challenged in the U.S. Court of International Trade (CIT). Ultimately, the Supreme Court ruled that IEEPA does not authorize the president to impose tariffs. In response, CBP announced it would stop collecting IEEPA duties beginning Feb. 24, 2026.

The ruling immediately raised questions about previously paid duties and the treatment of affected import entries. Notably, the Supreme Court’s decision did not directly address the refund of duties that already had been collected. Because the CIT has exclusive jurisdiction over the administration and enforcement of U.S. tariff laws, the issue was subsequently addressed there. In its ruling, the CIT indicated that the appropriate remedy could include the reliquidation of affected entries and refunds of duties determined to have been unlawfully imposed, while leaving the mechanics of the refund process unresolved.

CBP also indicated that the scope of the issue is substantial. Approximately 53 million import entries were potentially affected by IEEPA tariffs, with roughly 80% of those entries remaining unliquidated as of early March 2026. In addition, only about 7% of importers were enrolled in the CBP automated clearing house (ACH) program used for electronic refunds, raising practical concerns about how any large-scale refund process could be administered.

During the March 4, 2026, proceedings, the CIT paused the refund process while CBP explored potential administrative solutions, including the possibility of an automated refund mechanism that could be developed within approximately 45 days.

Key developments and proposed guidance

The evolving administrative response has led to the proposal of the Consolidated Administration and Processing of Entries (CAPE), a new capability within CBP’s Automated Commercial Environment (ACE) portal designed to process refunds of IEEPA duties.

Crowe observation

Because millions of import entries could be affected, the evolving refund framework presents operational and financial considerations for importers that are evaluating potential claims and compliance obligations.

Under the proposed framework, importers or customs brokers would submit refund claims through a web-based portal. The system would validate the entries included in the submission, removing entries that do not meet validation requirements so they can be corrected and resubmitted. Once validated, entries would move into a mass-processing stage that removes IEEPA duties, performs automated duty validations, recalculates duty liability, and prepares the entry for acceptance within the system.

Accepted claims then would move to the review and liquidation or reliquidation stage. During this stage, CBP would review submitted entries and process them through scheduled liquidation cycles. The system also would update entry summaries and calculate applicable interest associated with the duty adjustments.

The final component of CAPE involves the refund process itself. Refunds would be consolidated by liquidation or reliquidation date and issued electronically to the importer of record or a designated party through the ACH payment system. As a result, participation in the ACH program and accurate CBP Form 5106, “Create/Update Importer Identity Form,” information become operational prerequisites for receiving refunds.

The proposed system also introduces phased implementation. Phase one is expected to process most formal and informal entries in which IEEPA duties were paid. However, certain entries would be excluded from the initial rollout, including those subject to antidumping or countervailing duties and entries with ACE statuses such as “suspended,” “extended,” or “under review.” Certain transaction types, including warehouse withdrawals and drawback entries, also would fall outside the initial processing scope.

These developments highlight a broader administrative reality: The scale of the IEEPA tariff issue likely requires automated solutions rather than traditional protest-based processes. While importers may preserve refund rights by filing protests, doing so could extend resolution timelines by 18 months or longer. The CAPE approach suggests that CBP and the CIT recognize the impracticality of resolving tens of millions of affected entries through conventional protest procedures.

Looking ahead

For importers, the current environment presents both opportunities and uncertainties. The situation remains fluid, with multiple moving parts including court proceedings, potential administrative appeals, and the development of the CAPE platform.

In the near term, importers working with their advisers should consider several practical steps:

• Confirm whether they are enrolled in CBP’s ACH program and enroll if not already participating.
• Confirm existing import data entries are complete and accurate.
• Evaluate whether filing protests is appropriate for their circumstances. While protests preserve legal rights to refunds, they might lengthen the resolution timeline if a centralized administrative process ultimately resolves claims more efficiently.

Finally, importers should monitor additional guidance from CBP, the U.S. Department of the Treasury, and the courts. As the CAPE system is developed and tested, CBP likely will release further instructions regarding eligibility, documentation requirements, and submission procedures.