by David Zaiken

This is Part 1 of a three-part series on U.S. tariffs, refund strategies, and tax planning opportunities. Originally published in full on Bloomberg Tax, this series was authored by David Zaiken, Tax Director of Consulting at WebsterRogers LLP, alongside partners John Scannapieco and Alan Enslen of Womble Bond Dickinson (US) LLP, and Professor William VanDenburgh, PhD., of the College of Charleston.

The tariff landscape shifted dramatically on February 20, 2026, when the U.S. Supreme Court ruled that tariffs imposed under the International Emergency Economic Powers Act (IEEPA) of 1977 were not authorized by statute and are invalid. For businesses that have been paying IEEPA tariffs, this ruling opened the door to potential refunds, but navigating the process requires immediate attention and careful compliance.

Here is what importers need to know right now.

What the Court Did — and Did Not — Decide

The Supreme Court’s ruling invalidated the IEEPA tariffs but stopped short of ordering refunds. The Court remanded that question to the Court of International Trade (CIT), where Senior Judge Richard K. Eaton subsequently ruled on March 4, 2026, that U.S. Customs and Border Protection (CBP) must expeditiously develop a claim portal to process IEEPA tariff refunds.

The U.S. government has appealed Judge Eaton’s refund ruling, which creates meaningful uncertainty about timing. While that appeal works through the courts, businesses should be preparing now so they are ready to act the moment the path clears.

The CAPE Refund Tool: How It Works

On April 20, 2026, CBP activated the Consolidated Administration and Processing of Entries (CAPE), an automated refund tool being deployed in phases.

Phase 1 is currently limited to:

• Certain unliquidated entries.
• Certain entries within 80 days of liquidation.

Who can file: Only the Importer of Record (IOR) or its licensed customs broker may submit a CAPE Declaration through the IOR’s account within the Automated Commercial Environment (ACE).

Filing requirements:

• Each CAPE Declaration is limited to 9,999 entries (multiple declarations may be filed).
• All declarations must be uploaded in Comma-Separated Values (CSV) format.
• CBP will validate the submitted file for completeness, authorization, and integrity, then validate each individual entry.

Once accepted, ACE will delete the IEEPA Chapter 99 Harmonized Tariff Schedule provision and recalculate duties owed without the IEEPA tariffs applied. Refunds are expected to be issued electronically within 60 to 90 days of acceptance, subject to compliance review.

Important: As of February 6, 2026, CBP no longer issues refunds by paper check. IORs must enroll in electronic ACH refunds through the ACE portal’s “ACH Refund Authorization” tab before refunds can be processed.

What Entries Fall Outside Phase 1?

For entries in the 90- to 180-day post-liquidation period, importers must file a protest to preserve their refund claim.

For entries that have passed the final liquidation period entirely, Judge Eaton’s ruling did not provide a clear process. It appears those IORs will need to file a court challenge.

Reasons a CAPE Declaration Entry May Be Rejected

Businesses should carefully review entry data before submission. An entry may be rejected for any of the following reasons:

• Ineligible for Phase 1 (e.g., more than 80 days past liquidation, final liquidation, or not filed in ACE).
• Included within an excluded entry type or program (such as reconciliation entries, drawback entries, or AD/CVD entries pending liquidation instructions).
• Subject to an unresolved legal or administrative action.
• Duplicate or invalid entry number.
• Missing an IEEPA Chapter 99 HTS Code or a valid Chapter 1 through 97 HTS Code.
• Data file not saved in proper CSV format, corrupted, or containing non-numeric or extraneous data in the entry number column.
• IOR submitting the declaration does not match the ACE account of record.

A Critical Warning on Data Accuracy

CBP will review entry data submitted through CAPE, with particular scrutiny on:

• Whether the correct HTS codes were used.
• Whether the country of origin is reported accurately.
• Whether the valuation of imported goods is correct.

Submitting false information, or information the importer knew or should have known was false, may expose the IOR to civil and criminal liability. Businesses that did not submit the original entry data at the time of import should conduct a thorough self-inspection of their import data before uploading it to the CAPE portal.

The Bigger Picture: Uncertainty Remains

Even as the refund process moves forward, the tariff environment remains volatile. The Trump administration responded to the IEEPA ruling by imposing a universal 10% tariff on imports under Section 122 of the Trade Act of 1974. The CIT subsequently invalidated that tariff on May 7, 2026 — but only as to the plaintiffs in that case, and the Federal Circuit issued an administrative stay on May 12, 2026, pausing the ruling pending appeal.

In addition, President Trump has announced 76 new Section 301 investigations covering production overcapacity (16 countries) and forced labor practices (60 countries), along with new Section 232 sectoral tariffs on pharmaceuticals and active pharmaceutical ingredients.

The landscape is not settling. It is shifting. Businesses that import tangible property need to build real-time monitoring and compliance infrastructure now, not after the next announcement.

Part 2 of this series covers practical tariff mitigation strategies, from HTS reclassification and tariff engineering to transfer pricing, foreign trade zones, and supply chain restructuring. Part 3 addresses the significant tax planning opportunities created by the One Big Beautiful Bill Act — including bonus depreciation, R&D expensing, and expanded business interest deductions — and how they interact with your tariff strategy.

To discuss how these developments may affect your business, contact David Zaiken at WebsterRogers LLP.