Preparing for Potential IEEPA Tariff Refunds: What Steps to Take; What Deadlines Apply; How Might Refunds be Issued

By Marshall L. Olney, John C. Ramig

U.S. importers facing strong headwinds in 2025 and 2026 from International Emergency Economic Powers Act (IEEPA) tariffs have been waiting with bated breath for early relief in 2026 from the Supreme Court in its anticipated decision in Learning Resources v. Trump, which could potentially make IEEPA tariffs unlawful and require the government to refund billions of dollars.[1] As potential IEEPA tariff claimants await a decision, many are asking what steps they can take now to prepare, what deadlines could affect their ability to seek a refund, and when and how U.S. Customs and Border Protection (CBP) and U.S. Treasury may issue refunds. While the answers will depend on the Supreme Court’s ultimate ruling and each potential IEEPA tariff claimant’s specific circumstances, there are several developments that those affected by these tariffs should be aware of ahead of the decision.

When Can We Expect a Ruling and What Could the Delay Mean?

A common question is: when can we expect a decision? The Supreme Court does not provide a set timeline or deadline for issuing rulings. However, because the Court granted emergency relief after the government asserted serious national-security concerns, a decision could come at any time. But it is important to keep in mind that the Court’s ruling may not be a straightforward repeal, but instead could be a narrower, more measured approach. Moreover, the ruling may leave room for congressional action or the executive branch to rely on other statutory authorities. Even if the decision ultimately favors importers, there are likely to be significant procedural and administrative hurdles that will affect CBP and U.S. Treasury’s issuance of refunds.

Why IEEPA Refunds are Administratively Challenging.

The government has acknowledged that large-scale IEEPA tariff refunds would be administratively challenging for CBP and U.S. Treasury to administer. As a practical matter, a claimant’s ability to pursue a refund will first depend on whether entries are liquidated or unliquidated. For unliquidated entries, an Importer of Record (IOR)[2] may, in most cases, be able to make a correction in ACE through Post Summary Corrections (PSC). However, for liquidated entries, the path is more complex. This is because liquidation generally finalizes CBP’s assessment and leaves claimants with fewer remedial rights. Moreover, CBP has never had to make refunds of this type or scale.

Recent Developments for IEEPA.

For readers who have not been closely following tariff developments in recent months, several major events have unfolded. Most notably, the IEEPA tariffs remain in full force and effect, the Supreme Court has heard oral arguments challenging the President’s authority to issue IEEPA tariffs in Learning Resources v. Trump, CIT ruled that it had authority to order reliquidation of entries for the purpose of issuing IEEPA refunds, almost 1,000 companies have filed preemptive refund claims, and on February 6, 2026, CBP transitioned to mandatory, all-electronic duty refunds via the Automated Clearing House (ACH) with paper checks no longer issued except in very limited cases.

Learning Resources v. Trump – Executive Authority to Impose IEEPA Tariffs.

On November 5, 2025, the Supreme Court granted an emergency appeal and heard oral argument in Learning Resources v. Trump.[3] During oral arguments, the government’s defense of the IEEPA tariffs was met with significant skepticism and sustained criticism from multiple Justices. As a result, many legal commentators and pundits have been predicting that a decision would be published quickly. As the delay persists, an outright blanket rebuke of the President’s authority to use IEEPA to impose tariffs is less likely.

For those not familiar with the underlying case, Learning Resources, Inc., challenged tariffs imposed by President Trump under IEEPA, arguing that the statute did not authorize the broad, economy-wide tariffs at issue and that the President exceeded his delegated authority.[4] Learning Resources, Inc., sought declaratory and injunctive relief, as well as refunds of unlawfully collected duties.[5] The United States District Court, District of Columbia ruled in favor of Learning Resources, Inc., holding that the IEEPA did not grant the President authority to impose such tariffs and that the actions taken were unlawful, granting the plaintiff’s request for an injunction, which has been stayed, setting the stage for Supreme Court review.[6]

While the Court often gives deference to a sitting president’s signature policies, many legal commentators and pundits interpret the questions asked by the Justices to be very critical of the government’s argument. However, oral arguments are but one piece of what goes into the Court’s reasoning and should not be taken as a wholehearted indication of the eventual outcome.

AGS Co. Automotive Solutions v. CBP – CIT Authority to Refund Liquidated Entries.

In December 2025, CIT decided AGS Co. Automotive Solutions v. CBP, which clarified that CIT has authority to issue refunds on liquidated entries if the IEEPA tariffs are ultimately found unlawful.[7] In the trial, the government indicated that it would likely implement a process to comply with the Supreme Court’s eventual ruling but, in any case, it conceded the point that CIT had authority to order refunds and would not challenge that point in the future.[8] CIT determined that this statement combined with its authority sufficiently addressed the plaintiff’s concern over a lack of a remedy for liquidated entries in the event the Supreme Court found IEEPA tariffs unlawful. As a result, CIT did not grant the plaintiff an injunction to stop CBP from liquidating entries subject to the Supreme Court’s decision.[9] Moreover, CIT affirmed that the 180-day statute of limitations for administrative protests would not likely apply to IEEPA refunds as these were not a protest of an administrative decision made by CBP.[10] The central takeaway from this case is that importers have the ability to challenge and seek refunds for IEEPA-related tariff claims through the appeals process with CIT if CBP does not provide another remedy. As a result, importers have two years to appeal to CIT to recover prospective IEEPA tariff refunds on liquidated entries under 28 U.S.C. § 2636 instead of 180-days granted under 19 U.S.C. § 1514(c)(3) for an administrative protest. 

Increase in Companies Filing IEEPA Claims at the CIT.

Major import reliant companies such as Costco and Toyota made headline news by filing protective IEEPA appeals with CIT. As a result, there have been reports that almost 1,000 claimants have followed suit. These claims are currently being automatically stayed.[11] There is substantial debate as to whether possible claimants should file a protective petition or not. One important issue is whether CBP has the power to issue refunds once liquidated, currently an open issue of law. Moreover, while the government has agreed not to challenge CIT’s authority with respect to prospective IEEPA refunds, there is some question as to whether CIT has the ability to grant a mass ruling requiring the government to issue refunds if the Supreme Court does not. As a result, claimants would have to file individual appeals.   

Whether the cost of filing such a petition is advisable at this point will depend on the facts and circumstances of each claimant, who should consult legal counsel. Claimants may consider such factors as the amount of their potential IEEPA tariff refunds, the complexity of their anticipated refund claim (such as if it has been sold or assigned), when their IEEPA tariff entries were liquidated (two-year statute runs on a rolling basis for each entry),[12] their risk tolerance, the cost to file, and their ability to pursue a claim if their case is moved forward. For larger importers, a protective suit may function as insurance against procedural uncertainty. 

February 6, 2026, CBP End of Paper Check Refunds.

While CBP is not expected to provide advance detailed guidance on how it will issue refunds, based on recent U.S. Treasury and CBP policy, such refunds will likely need to be filed electronically on ACE and will be remitted through ACH electronic fund transfers. This is because on February 6, 2026, CBP transitioned to 100% electronic refunds for duties, taxes, and fees, and eliminating paper checks except for specific use cases.[13] This is part of U.S. Treasury’s concerted efforts to combat fraud.

While most importers, exporters, brokers, filers, sureties, service providers, facility operators, foreign trade zone operators, carriers, and any designated third parties listed on CBP Form 4811 have already adopted ACE, small claimants or claimants whose customs brokers do not make such filings will be most adversely impacted. Law firms may have the necessary software to make such filings on behalf of a claimant and supplement those providers whose customers could become eligible for anticipated IEEPA tariff refunds but may not be equipped to make such claims.

Unliquidated Entries.

Claimants seeking IEEPA-related tariff refunds upon a favorable Supreme Court decision on unliquidated entries will generally look to PSC procedures as the most direct mechanism to preserve and perfect their claims prior to liquidation.[14] Because PSC is designed to allow corrections to entry summary data in ACE before CBP finalizes duties, an importer may submit a PSC to adjust the relevant tariff-related reporting fields (e.g., classification, duty program indicators, or other data elements tied to the assessment of the IEEPA duties) and, where appropriate, request the resulting IEEPA duty recalculation before liquidation occurs.[15] Timing is critical: once an entry liquidates, PSC is no longer available, and the importer may need to pursue other remedies.[16]

The IOR and the importer’s licensed customs broker (acting as the entry filer) are the parties authorized to maintain ACE accounts and to submit entry corrections – including PSC – and to pursue duty-related adjustments that may support prospective IEEPA refund claims on eligible unliquidated entries.[17] In general, the party authorized to receive the refund proceeds is the IOR or their customs broker because the duties were paid by or on behalf of the IOR and the IOR bears responsibility for the entry. A customs broker may receive the refund in the course of processing the transaction, but the customs broker is not entitled to the refund and may only retain amounts that are authorized under the customs broker’s agreement (e.g., service fees) or otherwise permitted by law.[18]

In some situations, parties may need to change the IOR, and where the entry remains unliquidated, this is typically addressed through a PSC filed in ACE by the importer or its authorized customs broker. Practically, this involves coordinating with the customs broker to identify the affected entry numbers, confirming unliquidated status, preparing the corrected entry summary data, and submitting the PSC with appropriate supporting documentation so CBP can reassess duties prior to liquidation.[19]  

Liquidated Entries.

As discussed above, liquidated entries will present a greater challenge, not only for CBP in administering refunds on a large scale, but also for claimants and customs brokers attempting to determine who is authorized to file a claim and who is ultimately entitled to the refund proceeds. Unlike unliquidated entries, where corrections can often be made through established entry-summary mechanisms, liquidated entries raise additional procedural hurdles and create greater risk of disputes among commercial parties over ownership of any refund recovery.

In AGS Co. Automotive Solutions v. CBP, the government represented that it intends to implement procedures for claimants to seek IEEPA duty refunds if, and only if, the Supreme Court ultimately requires the government to issue such refunds.[20] Although CBP could establish an entirely new refund mechanism (and it may do so), it is more likely that CBP will route claims through an existing administrative structure. One likely pathway is drawback, which is already designed to return certain duties, taxes, and fees under defined statutory and regulatory requirements.

If CBP utilizes existing drawback procedures, the party entitled to file the drawback claim is typically the “drawback claimant”[21] (could be unclear who this would be for IEEPA tariff refund claims), unless the party has properly transferred its drawback rights to another eligible claimant.[22] In practice, a claimant typically files drawback electronically through CBP’s drawback systems, supported by required documentation showing the duty-paid importation, the qualifying event (IEEPA refund in this case), and compliance with recordkeeping requirements. Drawback claims are subject to strict time limits, and in general must be filed within five years of the relevant triggering event.[23]

Importantly, the five-year drawback filing window is different from – and does not replace – the two-year statute of limitations that may apply to filing suit at CIT if an IEEPA-related refund claim is denied or otherwise not granted.[24] Drawback is an administrative refund mechanism governed by its own statutory and regulatory timelines, and it generally allows eligible claimants up to five years to file a drawback claim.[25] By contrast, litigation at the CIT is governed by the Court’s jurisdictional statutes and strict filing deadlines, and many trade-related actions must be commenced within two years of the relevant decision or event.[26] As a result, even if CBP were to channel IEEPA refunds through a drawback-like process, claimants should not assume that the longer drawback filing period would preserve their ability to bring a timely CIT action if CBP denies refunds or fails to implement a workable procedure.

Where commercial parties wish to change who is entitled to claim the drawback, the most common mechanism is a transfer (or assignment) of drawback rights.[27] This is typically accomplished through a written agreement, often referred to as a drawback rights waiver or assignment, in which the party that would otherwise have the right to claim drawback transfers that right to another eligible claimant. These arrangements must be carefully structured to align with the applicable drawback category and CBP’s regulatory requirements, and they should be supported by clear contract terms addressing ownership of refunds, allocation of proceeds, documentation responsibilities, and cooperation obligations. Because drawback claims can implicate downstream pricing, reimbursement, and accounting issues, parties should ensure the transfer is consistent with their commercial contracts and supported by adequate records to withstand CBP review under the recordkeeping and audit provisions in 19 C.F.R. Part 190.

Customs Bond Refunds.

Unless otherwise provided, importers must either acquire a surety bond (Customs Bond) or put up certain collateral – generally in the form of Treasury Bills or other approved securities (Importer Collateral).[28] CBP may issue a bond insufficiency notice under 19 CFR §113.13(b) when an importer’s continuous bond (multi-entry bond) is inadequate, and the importer generally has 15 days to provide a sufficient bond. Increases in IEEPA tariff rates have led many importers to raise their continuous bond amounts due to higher duty exposure. If IEEPA tariffs were later deemed unlawful, importers’ reduced duty exposure may also justify lowering future bond amounts, although bond premiums are not automatically refundable.

Customs Bonds and Importer Collateral are based on the duties and tariffs – including IEEPA tariffs. With respect to Customs Bonds, these can either be purchased for a single entry or on an annual multi-entry or continuous basis. Continuous Customs Bond premiums are generally prepaid on an annual basis set at 10% of the importer’s prior 12 months’ duties, taxes, and fees, but may be more depending on the current importer’s requirements. Continuous bond premiums are generally prepaid annually and generally considered earned by the insurer upon issuance of the surety bond. Refunds of unearned premium may apply if the bond is terminated early, subject to the surety’s terms and applicable state insurance regulations.

Contractual Relationships and Allocating Prospective IEEPA Tariffs.

Over the last year, supply chains have been dealing with how to allocate the cost of the sudden onset of IEEPA tariffs. According to the U.S. Treasury data, retailers – and ultimately their customers – are bearing 75% to 96% of the tariff burden. This means that up to 25% is being absorbed in the supply chain. Unrelated manufacturers tend to absorb their share of IEEPA tariff cost in the form of price discounts rather than specifically itemized.[29]

The problem is that the IOR, which is likely the party eligible to claim an IEEPA refund, is often the party that bore the least burden of these tariffs in the supply chain as they generally pass these costs along the supply chain. Thus, the question is whether the IOR, or other claimant, who receives an IEEPA tariff refund is obligated to remit or assign such refund in whole or in part and what the tax consequence for such payment could entail.

Additional complexity may arise where the claimant or party contractually entitled to the IEEPA refund has been sold prior to receipt of such refund. The economic entitlement to the payment may depend on the terms of the acquisition agreement and the structure of the transaction (e.g., stock sale versus asset sale). As a result, questions may arise as to whether the former owner or the new owner is entitled to the refund or reimbursement, and which party must report the payment for tax purposes.

With respect to an importer’s remittance to the manufacturer of amounts representing prospective refunds of IEEPA tariffs, such remittances would likely be treated as a post-importation price adjustment. To the extent the remittance increases the price actually paid or payable for the imported merchandise, the transaction value may increase accordingly. As a result, additional customs duties may be owed if the merchandise is subject to other (non-IEEPA) tariffs.[30]

Where retailers are entitled to claim a prospective IEEPA refund or receive remittances from third-party claimants in respect of such refunds, those payments – while economically beneficial – may give rise to unintended tax consequences. As a general matter, amounts received in connection with a retailer’s trade or business are includible in gross income unless a specific exclusion applies.[31] The proper treatment depends on how the underlying tariff costs were previously treated for tax purposes. If the retailer paid and deducted the tariff amounts, a subsequent refund may be includible in ordinary income under general tax benefit principles and possibly in a different year than when they paid the tariffs, potentially causing a tax mismatch.[32] If, instead, the tariffs were capitalized into inventory, the refund may require a corresponding adjustment to inventory or cost of goods sold, affecting both taxable income and financial reporting, and if not deducted, may constitute a purchase price adjustment.

Furthermore, retailers may consider issuing refunds to customers, particularly where the retailer separately identified or itemized increased tariff amounts in the sales. Such payments would generally be characterized as a price adjustment or partial refund of the original purchase price. In many jurisdictions, if sales tax was collected on the original transaction, a corresponding reduction in the sales price may require the retailer to refund or credit the associated sales tax, subject to applicable state law procedures.

From the customer’s perspective, the federal income tax consequences would depend on the customer’s specific facts. In most cases involving consumer purchases, a refund of purchase price is treated as a reduction in the amount paid rather than taxable income. Similarly, if the payment is properly characterized as a purchase price adjustment rather than compensation for services or other income, the retailer would generally not be required to issue a Form 1099 or withhold taxes with respect to the refund.

Role of Legal Counsel in Liquidated and Unliquidated Claims

Legal counsel plays a critical role for both customs brokers and prospective refund claimants anticipating pursuing IEEPA-related tariff recovery, whether entries are liquidated or unliquidated. Attorneys can help develop the legal framework and filing strategy, interpret contractual reimbursement provisions, and oversee the process to ensure compliance while addressing inevitable irregularities in what is expected to be a complex and fast-moving recovery environment. Their involvement ensures that claims are properly structured, documented, and aligned with governing statutes, regulations, and contractual obligations.

For customs brokers, engaging legal counsel early is particularly valuable. Brokers frequently encounter complex client arrangements that make it difficult to determine who is authorized to file a refund claim and who is legally entitled to receive the proceeds. These challenges are especially pronounced in liquidated entries, where the party that paid the IEEPA duty may no longer be the party with the right to file the claim or retain the refunded funds. In such cases, refund proceeds may need to be distributed among importers, retailers, shippers, exporters, manufacturers, private equity firms, or other stakeholders whose entitlement arises from contracts, reimbursement provisions, separate legal authority, or established business practice. Additionally, many customs brokers do not routinely engage in drawback. A law firm with relevant experience can supplement the broker’s services, preserving existing broker-client relationships while ensuring technical compliance.

For claimants and others in the supply chain anticipating IEEPA refunds, legal counsel serves as a bridge among valuation experts, CPAs, and customs brokers. Refund distributions may have downstream implications for customs valuation, potentially triggering increased duties, or may affect transfer pricing in related-party transactions. Counsel can help coordinate these disciplines to ensure funds are allocated appropriately and, in a manner, consistent with claimant customs and tax strategy.

Conclusion

Although many legal commentators and pundits expect the Supreme Court’s decision in Learning Resources v. Trump to be favorable to importers, the ruling (whatever its scope) will likely be only the beginning of the refund process, not the end. Refund recovery will turn on entry-specific facts, including liquidation status, filing posture, documentation, and how CBP ultimately elects to administer refunds. In the near term, importers, retailers, and manufacturers should consider auditing their IEEPA exposure, identifying at-risk entries, confirming ACE/ACH readiness, and evaluating whether protective filings or other preservation steps are warranted based on their risk tolerance and potential refund amounts. Given the complexity of allocating refund rights among parties in the supply chain, parties should review contractual provisions addressing duties, refunds, reimbursement, pricing adjustments, and the obligations of parties in the supply chain before the rush to claim refunds begins.

[1] Oral argument heard Nov. 5, 2025, Learning Resources, Inc. v. Trump, No. 24-1287, Oral Arg. (U.S. argued Nov. 5, 2025).

[2] IOR defined in 19 C.F.R. § 141.0a.

[3] See supra note 1.

[4] Learning Resources, Inc. v. Trump, 784 F. Supp. 3d 209, 233 (D.D.C. 2025), cert. granted before judgment, 222 L. Ed. 2d 1231 (Sept. 9, 2025) and see Trump v. V.O.S. Selections, Inc., No. 25-250 (U.S. filed Sept. 4, 2025) (consolidated with Learning Resources v. Trump, No. 24-1287).

[5] See Id.

[6] See supra note 1.

[7] AGS Co. Auto. Sole. v. U.S. Customs & Border Prot., No. 25-00255 (Ct. Int’l Trade Dec. 15, 2025).

[8] See Id.

[9] See Id.

[10] 19 U.S.C. § 1514(c)(3).

[11] CIT’s Administrative Order 25-02 automatically stays all new IEEPA refund cases.

[12] 28 U.S.C. § 2636.

[13] See generally, 91 Fed. Reg. 21–36 (Jan. 2, 2026).

[14] PSC authority is grounded in CBP’s administration of the entry summary process under 19 U.S.C. § 1484, and the implementing regulations governing entry and entry summary procedures in 19 C.F.R. Part 141 (including 19 C.F.R. § 141.0a), together with CBP’s published PSC guidance and ACE business rules, which outline eligibility, required data elements, and filing mechanics.

[15] See 19 U.S.C. § 1504(d) (6 month deemed liquidation rule) and International Trading Co. v. United States, 412 F.3d 1303 (Fed. Cir. 2005). (The oft-cited “314-day rule” for liquidation does not appear in the statute but instead arises from the interaction of two provisions governing antidumping and countervailing duty cases. Under 19 U.S.C. § 1516a(e), following a final court decision, notice must publish of that decision and issue liquidation instructions within 180 days. Once suspension of liquidation is removed and CBP receives notice, 19 U.S.C. § 1504(d) requires CBP to liquidate the affected entries within six months, or they are deemed liquidated by operation of law. Courts, including the Federal Circuit in International Trading Co. v. United States, 412 F.3d 1303 (Fed. Cir. 2005), have interpreted these provisions together, and practitioners sometimes refer to the combined timing consequences as a “314-day” liquidation period, although no such standalone deadline exists in the statute.)

[16] Generally, importers have 180 days after liquidation to file a protest. See 19 U.S.C. § 1514(c)(3)(A) (A protest of a decision, order, or finding described in [this] subsection . . . shall be filed with the Customs Service within 180 days after but not before the date of liquidation or reliquidation, or in circumstances involving a decision other than liquidation, within 180 days after the date of the decision.) CBP can voluntarily reliquidate entries 90 days after liquidation. See 19 CFR § 173.3 (Within 90 days from the date notice of deemed liquidation or notice of the original liquidation is given to the importer, consignee, or agent, the Center director may reliquidate on his own initiative a liquidation or a reliquidation to correct errors in appraisement, classification, or any other element entering into the liquidation or reliquidation, including errors based on misconstruction of applicable law.)

[17] See 19 U.S.C.A. §§ 1484, 1641.

[18] See generally, 19 C.F.R. § 111.29.

[19] This process is grounded in CBP’s entry and entry summary framework under 19 U.S.C. § 1484 and the implementing regulations in 19 C.F.R. Part 141, including 19 C.F.R. § 141.0a.

[20] No. 25-00255 (Ct. Int’l Trade Dec. 15, 2025).

[21] See 19 C.F.R. 190.2.

[22] Drawback is authorized by 19 U.S.C. § 1313, with implementing regulations at 19 C.F.R. Part 190.

[23] See 19 U.S.C. § 1313 and 19 C.F.R. Part 190.

[24] See 19 C.F.R. §§ 190.3 and 190.10 trough 190.12.

[25] See 19 U.S.C. § 1313 and 19 C.F.R. Part 190.

[26] See 28 U.S.C. § 2636.

[27]See 19 C.F.R. § 191.33.

[28] See 19 U.S.C.A. § 1623, 19 CFR § 113.40, and 31 U.S.C. § 9303(a).

[29] No reliable data set is currently available to support the prevenance of price discounts.

[30] See 19 CFR § 152.103.

[31] See IRC § 61.

[32] See e.g., IRC §111 and Treas. Reg. 1.111-1.

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