IEEPA Tariff Refunds: Where the $166 Billion Refund Process Actually Stands and What Importers Should Do Now

Key Takeaways

The U.S. Supreme Court ruled on February 20, 2026, that IEEPA does not authorize the President to impose tariffs. The ruling invalidated the “reciprocal” and “fentanyl” tariffs applied to dozens of countries since early 2025.
Approximately $166 billion in IEEPA duties were collected across roughly 53 million entries from over 333,000 importers.
CBP is building a new system called CAPE (Consolidated Administration and Processing of Entries) inside ACE to process refunds. The claim portal is expected to go live in late April 2026, but will launch with limited scope and expand in phases.
Refunds will not be automatic. Importers must submit claims through the CAPE portal.
Fewer than 10% of eligible importers had completed ACH enrollment as of late March. Without ACH setup, refund payments will be rejected.
Meanwhile, President Trump replaced IEEPA tariffs with a 10% tariff under Section 122 of the Trade Act of 1974 (effective February 24), and that authority is already facing legal challenges.

Who This Is For

This post is for U.S. importers, customs brokers, freight forwarders handling U.S.-bound cargo, and supply chain finance teams trying to understand what the IEEPA refund process actually requires and when money might start moving.

What Happened: The Ruling

On February 20, 2026, the Supreme Court held in Learning Resources, Inc. v. Trump (6-3) that IEEPA does not grant the President authority to impose tariffs. The Court found that while IEEPA permits the President to “regulate” importation during a declared national emergency, that language does not clearly authorize tariffs. The Constitution assigns tariff authority to Congress, and the Court applied separation-of-powers principles to conclude that tariff authority of this scale requires explicit statutory delegation.

The decision invalidated both the “reciprocal” tariffs targeting dozens of countries and the drug-trafficking tariffs applied to Canada, Mexico, and China. Combined, these tariffs generated approximately $166 billion in revenue from early 2025 through January 2026, representing roughly half of all U.S. customs duties collected during that period.

The ruling was categorical on the legal question but silent on refund mechanics. As Justice Kavanaugh warned in his dissent, the refund process is likely to be a “mess.”

What Happened Next: The Replacement Tariffs

On the same day as the ruling, President Trump issued an Executive Order terminating IEEPA tariffs, then immediately issued a Proclamation under Section 122 of the Trade Act of 1974 imposing a “temporary” 10% tariff on most imports, effective February 24, 2026, for 150 days.

This matters because:

The tariff burden did not disappear. Importers now face Section 122 duties instead of IEEPA duties. The rate is different (a flat 10% vs. the variable IEEPA rates, which were often higher), but imports are not entering duty-free.
Section 122 is already being challenged. A coalition of 24 states filed suit in the Court of International Trade on March 5 to block the Section 122 tariffs. Additional Section 301 investigations into 15 countries and the EU were announced March 11.
De minimis suspension continues. The Executive Order preserved the suspension of duty-free de minimis treatment, meaning low-value shipments remain subject to duties regardless of the IEEPA ruling.
Section 232 and Section 301 tariffs are unaffected. Existing tariffs on steel, aluminum, and China-specific 301 duties remain in place. The IEEPA ruling only removes the IEEPA-specific layer.

For importers, the practical picture is: you may be entitled to refunds on IEEPA duties already paid, but you are still paying duties under replacement authorities on current imports.

The Refund Path: Where Things Stand

The Court of International Trade (CIT)

After the Supreme Court ruling, the refund question moved to the CIT, where over 2,500 lawsuits have been filed. The key case is Atmus Filtration, Inc. v. United States, assigned to Judge Richard K. Eaton.

Timeline of key CIT actions:

March 4: Judge Eaton ordered CBP to begin paying refunds immediately to all affected importers, regardless of whether they filed suit.
March 6: After a closed-door hearing, the court suspended the “immediate compliance” portion of that order. CBP told the court it cannot process refunds at this scale with existing systems.
March 12: CBP filed a status report describing CAPE, the new refund system being built inside ACE. Components were 40% to 80% complete.
March 19: CBP reported further progress. The claim portal was approximately 73% complete.
March 27: The CIT issued an amended order requiring reliquidation of all entries, including entries where liquidation is final (i.e., the 180-day protest period has expired). This expanded the scope of refund eligibility.
March 30-31: CBP reported the claim portal is approximately 85% complete and in testing.

The government’s deadline to appeal Judge Eaton’s order runs through early May 2026. An appeal could pause or delay the entire refund process.

The CAPE System

CBP’s refund mechanism is CAPE (Consolidated Administration and Processing of Entries), a new module being built inside ACE. Here is how it works:

Step 1: Claim submission. Importers or their authorized brokers submit a “CAPE Declaration” through a new tab in the ACE portal. The declaration is a CSV file listing entry summaries for which the importer is requesting IEEPA refunds.

Step 2: Automated validation. ACE runs two levels of checks:

File validation: formatting, required data, submitter authorization
Entry validation: confirms entry numbers exist in ACE, confirms at least one IEEPA tariff line was declared

If validation fails, ACE rejects the submission and identifies the issues. The importer corrects and resubmits.

Step 3: Mass processing. ACE automatically removes IEEPA-related HTS codes from accepted entries, recalculates the duties owed as if IEEPA had not been declared, and updates entry summaries.

Step 4: Review and liquidation/reliquidation. Entries are scheduled for liquidation or reliquidation a defined number of days after acceptance. CBP can conduct manual review where needed.

Step 5: Refund. ACE consolidates refunds by importer and liquidation date, calculates interest, and routes payments electronically via ACH. Refunds are paid to the importer of record (or a designated party via CBP Form 4811).

CBP expects CAPE Phase 1 to go live in late April 2026. Phase 1 will cover the majority of entries, but with exclusions.

What Phase 1 Covers and Does Not Cover

Included in Phase 1:

Unliquidated entries
Entries within the 90-day voluntary reliquidation period
Entries with ACE status of “Suspended,” “Extended,” or “Under Review” (IEEPA codes will be removed, but liquidation/refund waits for the normal process)
Warehouse and warehouse withdrawal entries (IEEPA codes removed; liquidation follows normal warehouse process)

Excluded from Phase 1:

Entries where liquidation is final (180-day protest period expired with no protest). The CIT has ordered these to be reliquidated, but CBP will address them in a later CAPE phase.
Entries flagged for reconciliation (Entry Type 09)
Entries designated on drawback claims
Entries covered by an open protest
Entries not filed in ACE or without a liquidation status in ACE
Entries subject to AD/CVD where Commerce has already issued liquidation instructions and entries are pending

For importers with complex entry portfolios, this means some refunds will be processed relatively quickly (weeks to months after CAPE launch) while others could take considerably longer.

The ACH Problem

CBP now issues all refunds electronically through ACH. Any importer that has not completed electronic refund enrollment in ACE will have their refund payments rejected.

As of late March 2026, approximately 26,664 importers had completed ACH enrollment, covering about 78% of entries and roughly $120 billion in IEEPA duties. That sounds like reasonable coverage by dollar value, but it means many smaller importers have not enrolled. CBP reported that over 7,700 refunds have already failed to process because importers were not enrolled.

If you are an importer of record and have not set up ACH in your ACE account, your refund will sit in reject status until you do. This is the single most actionable step most importers can take right now.

Who Gets the Money: The Pass-Through Question

Under applicable regulations (19 C.F.R. § 24.36), refunds are paid to the importer of record. But in many supply chains, the importer of record passed tariff costs downstream to buyers, retailers, or end customers.

This creates two overlapping disputes:

Downstream claimants. Plaintiffs’ firms have already begun filing consumer class actions against importers, arguing that tariff costs were passed through to consumers and should now be returned. Companies that publicly attributed price increases to tariffs face particular exposure.
Upstream questions. Importers who absorbed tariff costs themselves have a more straightforward claim. But importers who passed costs through may face pressure to share refunds with their customers, suppliers, or distribution partners.

The CIT revised its filing forms in January 2026 to require plaintiffs to identify any third-party financing supporting their claim, suggesting the court anticipated disputes over who benefits from refunds.

For companies managing these dynamics, public communications about refund expectations and pricing adjustments need to be carefully calibrated. Several law firms have flagged that investor-facing statements about expected refunds could create securities exposure if the timeline slips.

What Importers and Brokers Should Do Now

Before CAPE launches (target: late April 2026)

[ ] Confirm ACE account access. You need an active ACE account to submit a CAPE Declaration. If you use a customs broker, confirm whether they will submit on your behalf.
[ ] Complete ACH enrollment. This is the top priority. Without ACH setup, refund payments will be rejected.
[ ] File CBP Form 4811 if you want refunds routed to a designated party (e.g., a broker or parent company).
[ ] Audit your IEEPA entries. Identify all entry summaries where IEEPA duties were paid. Know the liquidation status of each: unliquidated, liquidated (not final), or liquidated (final).
[ ] File protests on liquidated entries. For entries that have already liquidated, the 180-day protest window is the deadline to preserve refund rights. If your entries are approaching or past the 180-day mark without a protest on file, you risk losing eligibility even though the CIT has ordered reliquidation.
[ ] Prepare your CSV file. CAPE requires a specific CSV format listing entry summaries. Organize your data now so you can submit quickly once the portal opens.

After CAPE launches

[ ] Submit your CAPE Declaration promptly. Given the volume (53 million entries, 333,000+ importers), early submissions may process faster than late ones.
[ ] Monitor rejection notices. If ACE rejects your submission or individual entries, identify the issue and resubmit corrected data.
[ ] Track the government’s appeal deadline. If the government appeals Judge Eaton’s order (deadline: early May 2026), it could delay or complicate the refund process. Monitor CIT docket updates.

For brokers and forwarders

[ ] Proactively communicate with your importer clients. Many importers, especially smaller ones, may not be aware of the ACH enrollment requirement or the CAPE submission process.
[ ] Clarify your role. Will you submit CAPE Declarations on behalf of clients? If so, confirm authorization and ensure your ACE broker account has the necessary access.
[ ] Be cautious about fees. The Reddit threads in the industry feeds already show importers questioning broker fees for handling IEEPA refunds. Set expectations clearly and early.

Operational Note: The IEEPA refund process requires importers to identify which entries are affected, what their liquidation status is, and whether they were filed under IEEPA-specific HTS codes. For companies managing hundreds or thousands of shipments across multiple brokers and carriers, that identification step is where the operational bottleneck sits. Knowing which containers, BLs, and bookings correspond to which customs entries is the kind of cross-referencing that breaks down when data lives in separate systems.

What to Watch Next

CAPE Phase 1 launch: Expected late April 2026. CBP has not given an exact date.
Government appeal deadline: Early May 2026. An appeal of Judge Eaton’s order could pause or restructure the refund process.
Section 122 litigation: The 24-state lawsuit challenging the replacement 10% tariff could create another round of refund-eligible duties if Section 122 authority is also struck down.
Section 301 investigations: The March 11 announcement of new Section 301 probes into 15 countries and the EU could result in additional tariffs layered on top of Section 122, changing the forward duty landscape again.
Phase 2 scope: CBP has not defined what CAPE Phase 2 will include or when it will launch. Importers with finally liquidated entries, AD/CVD-affected entries, or drawback-linked entries are waiting on this.