The thesis: the filing is customs work, the answer is costing work.
On 20 February 2026 the Supreme Court decided Learning Resources, Inc. v. Trump and held that the International Emergency Economic Powers Act does not authorise the President to impose tariffs. US Customs and Border Protection now runs a refund pathway called Consolidated Administration and Processing of Entries, CAPE for short, inside the ACE Portal. Phase 1 opened on 20 April 2026 and Phase 2 followed on 29 June 2026. Filing is genuinely simple: upload a comma separated values file listing entry numbers, tick one acknowledgement, and wait 60 to 90 days.
The simplicity is where finance teams get caught out. Duty paid at import did not sit in a duty account waiting to be reversed. It went into the cost of the goods it was paid on, which means it travelled into an inventory cost layer, and for entries filed through 2025 most of that layer has since been sold and relieved through cost of sales. Getting the refund is a customs task with a clear instruction sheet. Working out how much of it reduces inventory carried today, how much reduces an expense already recognised, and how much was recovered from a customer in the first place is a costing task, and nothing in the CBP process answers it for you.
The encouraging part is that the whole thing rests on data an importing business already has. The entry summary lines are in ACE and downloadable. The receipts, the cost layers and the quantities on hand are in the ERP. What is usually missing is the join between them, and that join is a piece of work with a clear finish line rather than an open ended programme.
What CBP actually does when a Declaration is accepted.
The mechanism is worth understanding before the accounting, because it decides both what arrives and when. A CAPE Declaration carries a list of entry numbers and nothing else. Each file is limited to 9,999 entries and one megabyte, multiple Declarations are allowed, and the Automated Broker Interface cannot be used, so this is a portal upload rather than something a broker system files on your behalf in the usual way. Only the importer of record, or the customs broker that filed those entry summaries for them, may submit it.
Once a Declaration passes validation, ACE updates the entry summary lines to remove the dutiable IEEPA Chapter 99 codes and the corresponding duties, producing a new version of the entry summary, then recalculates the duties owed without them. CBP reviews, the entries are liquidated or reliquidated, and refunds are consolidated and issued by Treasury through ACH. Nothing in that sequence looks at a product, a receipt or a cost. It operates on entry summary lines, and entry summary lines are the grain at which the answer comes back to you.
| Entry situation | CAPE treatment | What it means in practice |
|---|---|---|
| Unliquidated entries | Accepted and processed in Phase 1 since 20 April 2026. | The core population. No Court of International Trade case is needed for these, per CBP. |
| Entries liquidated within the preceding 80 days | Accepted and processed in Phase 1. | The 80 days leaves CBP room to reliquidate by day 90, the voluntary reliquidation limit in 19 U.S.C. 1501. Past that, the door is a different one. |
| Liquidation suspended, extended, or under review | Accepted, but not refunded immediately. | These keep their liquidation status. A validated refund is issued when the entry finally liquidates, which can be a long way out. |
| Flagged for reconciliation, no type 09 filed | Accepted since Phase 2 opened on 29 June 2026. | If the reconciliation entry is already on file, the entry is not accepted on a CAPE Declaration. |
| Warehouse withdrawals, types 31, 32, 34 and 38 | Accepted. | Warehouse entries themselves, types 21 and 22, are not. |
| Covered by an open protest, or on a drawback claim | Not accepted. | Two routes that already exist for the same money. Picking one closes the other for that entry. |
| Liquidation is final | Not accepted. | CBP offers no legal guidance on whether a case has to be filed at the Court of International Trade for entries outside Phase 1. |
| Any entry, by Post Summary Correction | Prohibited. | CBP states plainly that the trade community may not initiate an IEEPA duty refund request by filing a PSC. The CAPE Declaration is the pathway. |
One rule deserves to be read twice before anybody opens a spreadsheet. An accepted CAPE Declaration cannot be amended, and each entry may appear on only one accepted Declaration. An entry left off has to wait for a new filing with its own claim number and its own 60 to 90 day clock, and an entry submitted a second time is rejected. That single constraint converts what looks like a data extract into a completeness exercise, and completeness is an ERP question rather than a customs one.
U.S. Customs and Border Protection's tariff refund system has processed hundreds of thousands of new entries over the past two weeks and since coming online last month, it has cleared $20.6 billion in refunds for duties struck down by the U.S. Supreme Court to importers.
What the upload certifies, which is more than a list of numbers.
Before the file uploads, the filer ticks an acknowledgement. CBP’s own training material reproduces it, and it is not a formality about file formats. The filer attests, to the best of their knowledge and belief, that for each entry number in the file:
The country of origin declared on every entry in the file is true and correct.
The entry type is true and correct.
Every Harmonized Tariff Schedule classification on those entries is true and correct.
The valuation declared for each entry number is true and correct.
The goods were not entered in violation of any applicable United States law, order, or rule.
The acknowledgement goes on to note that making or causing material false statements or omissions to CBP in connection with a request for tariff reimbursement may bring criminal prosecution and civil liability, and it names 18 U.S.C. 1001, 542 and 545, 19 U.S.C. 1592 and 31 U.S.C. 3729(a) among the exposures. Up to 9,999 entries can go into one file behind that one checkbox.
Read constructively, this is an opportunity as much as an obligation. A business that can produce its entry population from ACE, tie each line to a receipt in its own system, and show that classification and origin match what it holds on the product master is in a strong position to file quickly and confidently. A business that cannot is being told, with a deadline attached, exactly which part of its master data has been running on trust. CBP confirms there are no new recordkeeping requirements here, so the existing obligations are the standard, and the question is whether the records meet them.
Worth pairing with a practical warning from CBP’s own programme page: there are no fees for processing a tariff refund, and fraudsters have been soliciting company and personal information from importers to interfere with the process. Anyone asking for a payment or for banking details in connection with a refund is not CBP.
Where the money belongs once it is recognised.
Two questions come first, and they are separate. When is the recovery recognised, and against what. On timing, there are two defensible approaches. An entity may apply the loss recovery guidance in ASC 410-30 by analogy, recognising an asset once recovery is probable, which the ASC Master Glossary defines as likely to occur, taking account of the government’s posture, whether a clear process exists, the outcome of relevant cases, and whether the entity intends to pursue collection. Alternatively an entity may apply the gain contingency guidance in ASC 450-30 and recognise the recovery when it is received. The choice is an accounting policy, so it is worth settling once, documenting the reasoning, and applying it consistently rather than revisiting it each quarter.
The second question is where the credit goes, and this is the one that needs the ERP.
| Where the duty sits now | Where the refund goes | Why |
|---|---|---|
| Duty still capitalised in inventory on hand | Reduce the carrying amount of the inventory. | Assets on which tariffs are paid are recognised under the cost accumulation model. Where the duty went into the cost basis of an asset still held, the refund comes back out of that basis rather than through the income statement. |
| Duty already relieved through cost of sales | Either reduce the previously affected expense line, or recognise other income. | Both are available, and the choice is a policy decision worth documenting once rather than deciding per claim. Whichever is chosen, gross margin by product will move if the credit is pushed back to cost of sales. |
| Duty capitalised into an asset other than inventory | Reduce that asset basis. | Duty on imported capital equipment followed the equipment. The refund follows it back, which touches depreciation schedules rather than margin. |
| Interest paid alongside the principal | Not an inventory cost adjustment. | CBP reports refund amounts with principal and interest separated in the ES-022 and REV-615 reports. The split exists in the source data, so it does not have to be estimated later. |
| Duty passed through to a customer under contract | A revenue question before it is a cost question. | Where a contract allowed the tariff to be passed on, the ruling may change the rights and obligations in that contract, which brings modification and variable consideration guidance into play. The money may not be yours to keep. |
The split between the first two rows is the whole exercise, and it is a quantity question answered per cost layer at the recognition date. Take an entry filed in July 2025 that carried duty on 8,200 units of one part. If 640 of those units are still on hand when the refund is recognised, then roughly eight percent of the duty on that line reduces the carrying amount of inventory and the rest goes to the income statement. Get that proportion wrong in the generous direction and current period profit is overstated while inventory sits on the balance sheet at more than it cost.
Two complications are worth naming early. Standard costing obscures the trail: a cost roll that absorbed duty into a new standard leaves the duty component recoverable only if the purchase price variance kept its origin. And entities that entered tariff monetisation arrangements, selling the right to their refunds to a funder for cash up front, have a different problem again, because an asset for a tariff refund is generally a nonfinancial asset that cannot be freely transferred, which tends to push those arrangements toward being accounted for as borrowings rather than as sales.
Why the deposit will not equal the claim.
Cash application teams should be warned before the first payment lands, because five separate mechanics sit between the number you calculated and the number that arrives.
| Mechanic | What CBP does | Effect on your reconciliation |
|---|---|---|
| Netting across the whole entry | CBP nets every over and under payment on an entry summary into a single revenue change at liquidation. | A value increase on line 001 and a classification decrease on line 002 arrive as one number. The refund on the Chapter 99 line is not paid to you in isolation. |
| Offset against unpaid debts | Refunds can be diverted to offset legally fixed and undisputed unpaid debts to the United States. | Diversion happens after liquidation and before the refund is issued. The REV-603 and REV-615 reports show a Refund Secondary Status of Funds Diverted once it has happened. |
| Consolidation by recipient and liquidation date | Approved refunds are grouped by the importer of record, or the designated notify party, and by liquidation date. | One deposit can cover many entries across many claims. Cash application by claim number will not reconcile. |
| Payment to a notify party | Where a notify party was designated on the original entry using CBP Form 4811, the refund goes to that party instead of to the importer of record. | A decision made years ago at entry filing time decides whose bank account the money reaches. Worth checking before anyone forecasts the cash. |
| Timing that is not the claim date | Refunds are generally issued 60 to 90 days after a Declaration is accepted, which includes 45 days for CBP review. | Entries that are suspended, extended, under review, or in warehouse hold their status and pay at liquidation, so a slice of any large claim will sit outstanding well past the rest. |
The good news is that CBP publishes enough to reconstruct all of it. The ES-022 CAPE Entry Summary Report links accepted Declarations, entries and refund numbers, and shows refund amounts with principal and interest separated. The REV-615 CAPE Details Refunds Report gives entry summary level detail for refunds sent to Treasury, keyed by a Consolidated Refund ID that comes from the REV-603 Trade Refund Report. The ES-701 and ES-702 liquidation notices carry the bill or refund amount on a change liquidation together with the interest. Build the reconciliation on those reports rather than on the bank statement, and the consolidated deposit becomes explainable instead of mysterious.
Importers reconciling IEEPA-dutied entries now will recover capital sooner.
The data model that answers both questions.
One record type does most of the work: a line that knows both its customs identity and its costing identity. Most ERP landed cost implementations hold the second and treat the first as a document reference on a shipment, which is enough to pay a broker invoice and not enough to file a refund or to book one.
entry_number and entry_summary_line
The join key back to CBP. Most ERP receipts carry a purchase order and a shipment reference but not the entry summary line the broker actually filed, and the line is where the Chapter 99 provision sits. Without it the refund cannot be attributed to a receipt at all.
hts_chapter_99_provision
Which IEEPA provision was declared, held per line. This is what CAPE strips out, and it is also what distinguishes a refundable duty from a Section 232 or Section 301 duty on the same entry that stays exactly where it is.
duty_component_breakdown
Landed cost split by component rather than carried as one duty figure. An entry can hold ordinary duty, a Section 232 amount and an IEEPA amount at once, and only one of those three is coming back.
receipt_id and cost_layer_id
The link from the customs line to the specific receipt and the FIFO or weighted average layer it fed. This is the join that decides whether a refunded dollar reduces inventory or reduces cost of sales, and it is the one most often missing.
quantity_remaining_on_hand
How much of that layer is still held, as at the recognition date rather than as at import. For entries filed twelve to twenty months ago the honest answer is usually a small fraction, and the working needs to be reproducible.
standard_cost_revaluation_events
Every roll, revaluation and intercompany transfer the layer passed through. A standard cost roll that absorbed the duty into a new standard breaks the trail unless the variance was captured with its origin intact.
customer_passthrough_flag and contract_id
Whether the tariff was recovered from a customer under a specific contract, held against the contract. Where it was, the refund raises a question about that contract before it raises one about margin.
refund_principal and refund_interest
Kept apart from the moment the ACE report is loaded. Principal follows the asset or the expense it came from. Interest does not, and merging them at import time makes the split unrecoverable.
notify_party_id
The Form 4811 designation on the original entry, so the expected recipient is known before the cash is forecast rather than after it fails to arrive.
One entry summary line, carrying both identities
{
"entry_number": "ABC-1234567-8",
"entry_summary_line": "002",
"entry_date": "2025-07-14",
"liquidation_status": "unliquidated",
"hts_primary": "8544.42.9090",
"hts_chapter_99": "9903.01.25",
"customs_value_usd": 412750.00,
"duty_ordinary_usd": 10318.75,
"duty_section_232_usd": 0.00,
"duty_ieepa_usd": 41275.00,
"receipt_id": "GR-2025-084412",
"cost_layer_id": "FIFO-SKU4471-20250801",
"sku": "SKU-4471",
"quantity_received": 8200,
"quantity_remaining_on_hand": 640,
"duty_ieepa_still_in_inventory_usd": 3221.95,
"duty_ieepa_relieved_to_cogs_usd": 38053.05,
"customer_passthrough_flag": false,
"notify_party_id": null,
"cape_declaration_id": null
}The two derived fields at the bottom are the deliverable. Everything above them exists to make those two numbers reproducible, and reproducible is the operative word: an auditor reviewing the period in which the credit is recognised will ask how the split was arrived at, and a spreadsheet built once from memory is a weaker answer than a query that can be re-run.
The duty component breakdown matters more than it looks. Section 232 and Section 301 duties sit on the same entries and were never in scope, and the unstacking rules published while the IEEPA tariffs were live mean a single article could carry one and not the other. Articles with at least 20 percent US originating content had to be broken into two entry summary lines so that the US content and the non US content could be reported at different rates. A landed cost figure that blended all of that into one number per receipt cannot be unpicked without going back to the entry summary, which is a good reason to store the components separately from here on regardless of how this particular refund lands.
Implementation checklist.
Pull the entry population from ACE before you pull it from anywhere else. The ES-003 Entry Summary Line Tariff Details Report carries an IEEPA tariff indicator and shows every entry line with assessed duties, which makes it the authoritative list. A broker spreadsheet is a useful cross check and a poor starting point.
Reconcile the ACE list against your own receipts before you upload anything. A Declaration cannot be amended once accepted, and an entry can appear on only one accepted Declaration, so an entry left out has to wait for a second filing and an entry included twice is rejected. Completeness is cheaper to get right before the upload than after it.
Fix the leading zero problem in the CSV. Entry numbers beginning with a zero are rejected unless an apostrophe is placed directly before the zero, which is exactly the kind of defect a spreadsheet export introduces silently. The file also has to carry an Entry Number header and stay under one megabyte, so large populations need splitting.
Separate refundable duty from duty that is staying. Section 232 and Section 301 amounts sit on the same entries and are unaffected by the ruling, and the unstacking rules mean a single article can carry one and not the other. A landed cost record that holds one blended duty figure cannot answer this without going back to the entry.
Rebuild the cost trail from the entry line to the cost layer while people still remember it. This is the long pole. Match each Chapter 99 line to the receipt it priced, then to the layer, then to what remains on hand today, and keep the working. It is the evidence for the split between balance sheet and income statement.
Choose the recognition model and write down why. A loss recovery approach recognises an asset when recovery is probable, meaning likely to occur. A contingent gain approach waits for receipt. Both are defensible, the choice is an accounting policy, and it needs disclosure and consistent application rather than a fresh judgement each quarter.
Check the Form 4811 notify party designation on the entries before forecasting cash. If a notify party was designated at entry, the refund is issued to that party rather than to the importer of record, and no amount of chasing at the treasury end changes it.
Set up cash application to expect a consolidated deposit. Refunds arrive grouped by recipient and liquidation date, netted across each whole entry and reduced by any offset. Load REV-615 at entry summary level and reconcile the deposit to a group of entries rather than to a claim.
Ask whether the tariff was recovered from customers, contract by contract. Where a contract allowed a pass through, the refund may belong to the customer or may create pressure for a concession. That answer changes the accounting and it is a commercial conversation with a long lead time.
Treat unsolicited help with suspicion. CBP charges no fee for processing a refund and has warned that fraudsters are soliciting company and personal information from importers to interfere with the process. Anyone asking for a fee or for banking details is not CBP.
Sequence it by what expires. The entry population and the filing come first, because entries move from unliquidated to liquidated to final while you deliberate, and the Phase 1 window is defined by liquidation timing rather than by your close calendar. The cost layer reconstruction comes second and can run in parallel with the 60 to 90 day wait. The recognition policy and the customer pass through review come third, since they are judgements that benefit from having the numbers in front of them.
Constructive failure modes to design around.
Filing the Declaration before the entry list is complete. Acceptance is one way. Entries left off need a second Declaration and entries submitted twice are rejected, so a rushed first file turns into several files, several claim numbers and a reconciliation nobody planned for.
Certifying classification and valuation you have not checked. The upload attests that country of origin, entry type, classification and valuation are true and correct for every entry in the file, with the acknowledgement pointing at 19 U.S.C. 1592 and 31 U.S.C. 3729(a) among others. Nine thousand entries can go into one file behind one checkbox, and the attestation covers all of them.
Recognising the whole refund in cost of sales because it is simpler. Where the duty is still sitting in inventory on hand, the credit belongs against that carrying amount. Taking it all to margin overstates current period profit and leaves inventory carried above what it cost.
Blending principal and interest at load time. CBP publishes them separately for good reason. Once they are added together in a staging table the split cannot be recovered without going back to the ACE reports, and only one of the two follows the inventory.
Reconciling cash by claim number. Refunds are consolidated by recipient and liquidation date, netted across the entry and reduced by any offset for unpaid debts, so a deposit will rarely equal a claim. Expecting a one to one match produces a queue of unapplied cash and a slow month end.
Assuming the duty burden went away with the refund. Tariffs at similar levels were imposed under other legal authorities after the ruling, and Section 232 and Section 301 duties were never in scope. A refund of past duty and a lower cost of importing today are different things, and forecasting on the first will disappoint.
Leaving the cost layer reconstruction until the cash arrives. Entries filed in 2025 have passed through standard cost rolls, revaluations and intercompany moves since. Every month that passes makes the trail from entry line to remaining inventory harder to walk, and the auditor will ask for it in the period the credit is recognised.
The pattern across all of them is the same. Every one is a join that was never built, between a customs record and a cost record, and each becomes harder to build as time passes and layers turn over. A team that spends two weeks on the join gets a filing it can stand behind, a split it can evidence, and a cash reconciliation that closes. A team that skips it gets the money and then spends the next two quarters explaining it.
What to ask ERP and costing vendors now.
Can the system hold the customs entry number and entry summary line against the goods receipt, so a duty amount can be traced from the ledger back to the line the broker filed?
Is landed cost stored by component, keeping ordinary duty, Section 232, Section 301 and IEEPA amounts separately rather than as one blended figure?
Can it report, for any past entry, how much of the duty capitalised through that receipt remains in inventory on hand today, and show the working across cost layers?
Does the costing engine preserve the origin of a duty component through a standard cost roll, a revaluation and an intercompany transfer?
Can a refund be applied as a reduction of inventory carrying amount for the quantity still held and to cost of sales for the rest, in one posting with a reproducible split?
Are refund principal and interest carried as separate fields from the point of import, and can each be posted to a different account?
Can cash application match a single consolidated deposit against a group of entries, rather than requiring a one to one match to a claim?
Does the platform record whether a tariff was recovered from a customer, held against the contract that allowed it?
Can it produce the entry population for a refund filing as a validated file, including a check for duplicates already submitted and correct handling of entry numbers that begin with a zero?
A platform that stores the entry summary line against the receipt, keeps duty components apart, and can report how much of a past duty amount remains in inventory today has already built what this needs. The remaining judgements, which recognition model applies and whether a customer has a claim on the money, belong with the controller and with commercial teams, which is where they should sit.
Practical takeaway.
Large sums are moving back to importers through a process that is genuinely straightforward to use. The part that rewards preparation is everything either side of the upload: a complete and certifiable entry population going in, and a defensible split between balance sheet and income statement coming out. Both rest on one link that most systems never had a reason to store, from the customs entry summary line to the cost layer it priced. Building it now pays for itself on this refund, and it keeps paying, because duties on imported goods are still being levied under other authorities and the next question about landed cost will arrive against the same join.
Sources.
- U.S. Customs and Border Protection: International Emergency Economic Powers Act (IEEPA) Duty Refunds, the live programme page covering CAPE phases, netting under 19 C.F.R. 159.1 and refund diversion under 19 C.F.R. 24.72
- U.S. Customs and Border Protection: Trade Information Notice, Consolidated Administration and Processing of Entries (CAPE), last updated 10 July 2026, publication 1009-1119
- U.S. Customs and Border Protection: Trade Information Notice, CAPE Phase 1, April 2026
- U.S. Customs and Border Protection: IEEPA Duty Refunds and CAPE, April 2026 trade webinar deck, publication 5525-0426, including the CAPE Declaration certification text
- Supreme Court of the United States: Learning Resources, Inc. v. Trump, No. 24-1287, argued 5 November 2025, decided 20 February 2026, slip opinion
- U.S. Customs and Border Protection: IEEPA Frequently Asked Questions, retained for reference, source of the unstacking provisions and the 20 percent US content rule that split articles across two entry summary lines
- Grant Thornton: Snapshot 2026-04, Accounting implications of SCOTUS tariffs ruling, 17 March 2026, revised 21 April 2026
- eCFR: 19 C.F.R. 24.72, offset of unpaid debts owed to the United States against amounts otherwise payable
Every rule, date, threshold and report name above comes from the CBP publications and the Supreme Court opinion linked here, read in the original rather than in summary. The accounting discussion follows the Grant Thornton snapshot, which sets out the loss recovery and contingent gain approaches and the cost accumulation treatment. Two public posts on X are quoted, from Law360 on 27 May 2026 and from Supply Chain Logistics Consulting on 3 July 2026, and both were opened and verified before being cited. A wider set of practitioner posts could not be assembled honestly, since a logged out view of X exposes only a handful of recent posts per account and search needs a session, and nothing has been invented to fill the gap. The numbers in the example record are constructed to show the shape of the calculation and are not drawn from any real importer. Litigation over entries outside CAPE Phase 1 was continuing at the time of writing, so eligibility beyond Phase 1 and Phase 2 is described as CBP describes it and not as settled.