From an executive order implementing sweeping global tariffs to a Supreme Court ruling invalidating them and many steps in between, a lot has happened regarding tariffs in the last thirteen months. This alert outlines where tariff policy now stands and action steps for taxpayers who are importers affected by the Internal Emergency Economic Powers Act (IEEPA) tariffs.
Tariff Background
President Trump declared national emergencies related to drugs and trade deficits in February and April 2025, respectively, and imposed tariffs under the IEEPA. The levels of the tariffs have fluctuated numerous times since their imposition.
IEEPA Tariffs Found Unconstitutional
On February 20, 2026, the Supreme Court ruled the IEEPA tariffs unconstitutional but failed to provide guidance around refunds.
What Has Happened Since the IEEPA Supreme Court Decision?
- February 20, 2026: President Trump issued an executive order stopping the collection of all IEEPA tariffs going forward that otherwise would be owed.
- March 4, 2026: The U.S. Court of International Trade (CIT) in the case of Atmus Filtration, Inc. v. United States ordered the U.S. Customs and Border Protection (CBP) to refund the IEEPA duties (the Order). The Order directs CBP to do the following:
- 1. Liquidate all unliquidated entries without the imposition of the IEEPA tariffs
- 2. Reliquidate all previously liquidated entries now without the imposition of the IEEPA tariffs
- March 5, 2026: The CIT amended its order in Atmus Filtration to read: “U.S. Customs and Border Protection [must] liquidate those entries without regard to the IEPPA duties” and that the “liquidated entries for which liquidation is not final shall be reliquidated without regard to those duties.”
- March 6, 2026: In response to a same-day CBP filed declaration (the Declaration) requesting a 45-day extension to update its Automated Commercial Environment (ACE) system and processes to handle the enormous volume of refunds (53 million entries, $166 billion of collected IEEFA tariffs across 330, 000 importers) the CIT Judge Richard Eaton issued a pause on his order for immediate refunds while the CBP’s declaration is considered.
What Should Taxpayers Expect?
The Declaration set forth a potential process for refunds of unliquidated entries and liquidated entries that are not yet final:
- Importer files a declaration in ACE that includes a list of entries on which IEEPA duties were paid.
- ACE runs a series of validations on each entry and recalculates any refund (and applicable interest).
- CBP verifies and processes the refunds as soon as possible.
- ACE automatically finalizes the entries on which refunds were issued.
- ACE automatically aggregates the refunds (with interest) by importer and liquidation date.
- CBP certifies the refunds.
- The Department of the Treasury issues the refunds electronically.
Your Guide Forward
Cherry Bekaert is able to assist your organization when navigating a variety of tariff-related situations, including data collection, accounting and tax, audit, and more.
Data and Records
Whether an administrative solution is sought or legal action is taken, it is incumbent for affected taxpayers to have clean and complete data on the IEEPA tariffs paid. Cherry Bekaert is situated with a team of knowledgeable professionals across our CFO Advisory and Forensic Accounting practices who do data for a living.
Related-party Transactions
Instances where IEEPA tariffs were paid and the cost of which were passed on to a related party, be that a non-U.S. exporter or a downstream U.S. reseller, taxpayers will need to understand which related party ultimately should benefit from that refund. Cherry Bekaert’s International Tax Transfer Pricing team has deep experience navigating related-party transactions and allocations of profit, losses, gains, and deductions.
Accounting and Tax
Refunds will have real-world financial and tax consequences, including the interest component. Determine that the right credits and debits, as well as understanding the consequences of the refund and any interest paid, will be important both for financial statement and annual tax filings. Cherry Bekaert’s State and Local Tax (SALT) and Tax Services teams are prepared to assist with understanding the tax costs of such refunds and our accounting professionals can help you prepare to account for the real book impacts of your refund actions (including the costs of pursuing them).
Audit
IEEPA tariff refunds present both technical accounting and audit evidence challenges including the downstream impact on inventory valuation and gain contingency considerations. Our Assurance and CFO Advisory teams are poised to assist companies working to address both the audit and financial reporting needs, subsequent event disclosures and contract related implications.
Legal
While Cherry Bekaert does not offer legal services, we have strong coast-to-coast connections throughout the legal community, from boutiques and regional offices to national and international full-service law firms. With our experience and knowledge, we are happy to provide recommendations to a firm that might best fit your business needs.
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