The Supreme Court ruled in February 2026 that IEEPA tariffs were unconstitutional, opening the floodgates to 40 billion has already flowed back to importers. It sounds like a massive win for small businesses that suffered through years of tariff impacts—but there's a catch that's locking most of them out entirely.
If you're not the "Importer of Record" on your original customs entry, you can't claim a dollar of those refunds. And for most small importers, that person is someone else: a freight forwarder, a supplier in another state, or a customs broker. This gap between who actually paid the tariff and who gets to claim the refund is costing small businesses millions in unclaimed money.
The $166 Billion Window That's Closing
After nearly a decade of tariff uncertainty—from Section 301 tariffs on Chinese goods to IEEPA duties on semiconductor equipment—importers have been absorbing historically high duties. Many small businesses took out lines of credit or second mortgages just to keep the lights on while waiting for tariff policy to clarify.
The Supreme Court ruling and CBP's CAPE portal are that clarification. But the refund isn't automatic. Importers have to submit a formal declaration through the ACE Portal by uploading a CSV file, and CBP will process refunds within 60 to 90 days via electronic bank transfer.
Phase 1, currently open, covers entries that are either still unliquidated or were liquidated within the past 80 days. CBP estimates Phase 1 covers roughly 63% of IEEPA tariffs paid. Older entries can still be claimed through a "protest" filing (which takes longer and has a 180-day deadline from liquidation), but the Phase 1 window is the path of least resistance.
The Importer-of-Record Rule That Blocks Most Small Businesses
Here's where the refund system breaks down for most small importers: only the entity listed as the Importer of Record (IOR) on the customs entry—or the licensed customs broker who filed on their behalf—can submit a refund claim through CAPE.
For small importers who buy through wholesalers, distributors, or foreign suppliers, this is almost always not you.
Consider a typical scenario: You run an e-commerce or retail business and buy products through a supplier in another state. That supplier arranges shipment with a freight forwarder. The freight forwarder's customs broker files the entry with the supplier's company (not yours) listed as the IOR. The tariff duties get paid at the dock, and the supplier rolls those costs into your invoice.
You paid the tariff. You absorbed the cost in your margin. But you cannot claim the refund because you're not the IOR on the entry. The supplier can claim it—but they're not motivated to do so, because the refund isn't necessarily their legal obligation to pass back to you.
This structural lock-out affects:
- Importers using freight forwarders (common for LTL and small shipments)
- Businesses buying through wholesalers or distributors
- Marketplace sellers using 3PL fulfillment partners who handle customs
- Drop-shippers relying on foreign suppliers to arrange entry
- Small manufacturers importing components through multiple tiers of suppliers
The Accounting Headache: Recognizing Refunds You May Never See
The other challenge is bookkeeping: how do you account for a tariff refund when you're not the one filing the claim?
Under U.S. GAAP (ASC 450), a tariff refund is a gain contingency—you can't recognize it in your financial statements until it's realized or virtually certain. This means:
If the refund is being claimed by someone else (your supplier or their customs broker):
- You cannot record a receivable unless you have a legal agreement guaranteeing the supplier will refund you
- You cannot record income until cash arrives
- If cash never arrives, you have no legal claim
If you're claiming the refund yourself:
- Record it as a reduction to Cost of Goods Sold (if inventory was already sold) or as a credit to inventory (if inventory is still on hand)
- Timing matters: recognize the refund in the period you receive it, not when you become aware of it
- If you passed a "tariff surcharge" to your customers, you may have a legal obligation to share the refunds under ASC 606
This accounting ambiguity means many small businesses never bother to claim—or coordinate the claim—because the bureaucratic burden outweighs the expected payback.
How the CAPE Portal Actually Works (If You're Lucky Enough to File)
If you are the IOR or your customs broker has authority to file on your behalf, the CAPE process is relatively straightforward:
- Access the ACE Portal (Automated Commercial Environment Secure Data Portal) through CBP's e-Customs.
- Upload a CSV file (the "CAPE Declaration") listing the entries you want to refund.
- Verify bank details are on file with CBP—refunds are issued via ACH, not check.
- Submit and wait—CBP reviews for compliance (checking HTS codes, entry dates, IEEPA eligibility).
- Receive refund (approximately 60–90 days after approval, assuming no compliance holds).
Phase 1 eligibility is tight:
- Unliquidated entries (still pending final duty assessment)—eligible now
- Entries liquidated within 80 days—eligible now
- Entries liquidated more than 80 days ago—must file a "protest" instead (more complex, longer timeline)
What Small Importers Actually Need to Do
If you suspect you've overpaid tariffs, here's the triage:
Step 1: Find Out Who the IOR Is
Pull your customs entries (through your freight forwarder, your supplier, or a customs broker). The IOR is listed on the entry paperwork. If it's you, great. If it's your supplier or a freight forwarder, you need to contact them immediately.
Step 2: Contact the IOR and Explain Your Position
If your supplier is the IOR, send a letter requesting they file for refunds and pass proceeds back to you. Keep it simple: explain that you ultimately paid the tariff (it's in your invoices), provide entry numbers, and ask for a refund timeline.
Important: Don't wait. Phase 1 has an 80-day window. Entries liquidated on June 17 or earlier are no longer eligible for Phase 1; they'd need a protest instead.
Step 3: Negotiate Refund Sharing
If your supplier refuses or drags their feet, negotiate:
- Ask them to file and split the refund 50/50 (they keep the time/effort cost, you get half recovery)
- Request they file and pass through 100%, with you covering filing costs if needed
- If they won't budge, consult a customs broker or trade attorney about your legal options
Step 4: Update Your Books
Once you receive a refund (or confirm you won't), record it properly:
- If inventory is still on hand, reduce the inventory carrying value
- If inventory is sold, record as a reduction to COGS in the current period
- Do not record the refund as revenue or other income—it's a reversal of a prior cost
Step 5: Plan for Older Entries
If your entries are older than 80 days past liquidation, protest filing still works, but it's messier (requires more documentation, longer timelines). Prioritize Phase 1 entries first.
The Compliance Trap: What CBP Actually Checks
Not every refund filing is automatically approved. CBP will review for:
Tariff Classification Validity
- Were the goods correctly classified under the HTS (Harmonized Tariff Schedule)?
- Some entries might be ineligible if the goods fall under exemptions or different tariff codes than what was claimed
Entry Date and Liquidation Window
- Phase 1: unliquidated or within 80 days of liquidation
- Phase 2 (coming later): 80+ days past liquidation (estimated to cover 37% of remaining tariffs)
Outstanding CBP Debt
- If you owe duties, penalties, or fines to CBP, they may offset your refund against those debts
- Make sure your banking details are set up separately in ACE so CBP doesn't accidentally apply your refund to an old debt
Duplicative Claims
- If you already filed a protest, a duty drawback, or another form of claim on the same entry, you can't also file through CAPE
Keeping Clear Records for Refund Claims
To make the refund process painless—and to protect your bookkeeping—start now:
Collect and organize:
- All customs entries (Entry/Immediate Delivery, Entry Summary, Commercial Invoice)
- Proof of duty payment (receipt from CBP, bank transfer confirmation)
- Corresponding invoices showing tariffs passed through to you
- Any surcharges you collected from customers (important for ASC 606 reconciliation)
Create a tariff refund tracker (spreadsheet or beancount account):
- Entry number
- Entry date and liquidation date
- Goods description and HTS code
- Duty amount paid
- IOR name and contact
- Status: "eligible Phase 1," "too old, needs protest," "claiming with supplier," "refund received"
Coordinate with your bookkeeper or accountant before filing to clarify:
- Timing of refund recognition (ASC 450 rules)
- Whether customer refunds are owed (ASC 606 rules)
- Whether to reduce inventory or COGS
- Tax treatment (do refunds affect your tax return?)
Simplify Your Import Bookkeeping
Managing tariff refunds, landed costs, and multi-tier supplier arrangements is genuinely complex. As importers navigate the CAPE portal and negotiate with suppliers, accurate bookkeeping becomes the difference between recovering dollars and losing them to accounting errors.
Beancount.io provides plain-text accounting that gives you transparency and version control over every tariff entry, refund, and customer reconciliation. With clear records in Beancount, you'll know exactly which entries are eligible for refunds, how much you're owed, and whether customer refunds are contractually due. Get started for free and build the accounting foundation that lets you claim every dollar the CAPE portal owes you.
Key Takeaways
- $166 billion is available, but eligibility is strict: you must be the IOR or have a customs broker file on your behalf.
- 80-day Phase 1 window is closing fast; entries liquidated before June 17 need a protest instead.
- You probably aren't the IOR, meaning your supplier or freight forwarder controls your refund claim.
- Negotiate refund-sharing agreements with your supplier now, before the window closes.
- GAAP rules prevent you from recording the refund as income until it's received; track it as inventory or COGS adjustment.
- Organize your customs records to make filing fast and to avoid CBP compliance holds.