What Your AP Team Needs to Know About IEEPA Refunds

Accounts payable processed the IEEPA duty payments. Now those payments are coming back. The Supreme Court’s February 2026 ruling in Learning Resources, Inc. v. Trump invalidated IEEPA tariffs, and the CIT’s March 4 order directed CBP to process refunds on all duties paid between February 2025 and February 2026.

For AP teams, this creates a set of very specific tasks: locating historical duty payment records, reconciling them against customs entry data, preparing for incoming refund deposits, and managing any vendor credits or adjustments tied to the recovery. It’s detailed work, and nobody else in the organization has the payment-level data that AP controls.

This guide walks through what your AP team needs to do, step by step. For the broader financial strategy, see our CFO guide to IEEPA tariff recovery. For the accounting treatment, see the controller’s guide to booking IEEPA receivables.

Understanding how IEEPA duties were paid

Before you can reconcile refunds, you need to understand the payment mechanics. IEEPA duties were paid to CBP through one of these channels:

ACH debit through the Automated Clearing House. Most duties are paid via ACH debit from the importer’s designated customs bank account. The payment is initiated by CBP upon entry liquidation (or estimated at entry summary). Your bank statements show these debits under the payer name “USCBP” or “US CUSTOMS.”

Periodic monthly statement (PMS). Companies on the PMS program consolidated all duties from entries filed during a monthly period into a single payment. This means one bank debit may cover dozens of individual entries, each with its own IEEPA surcharge component.

Daily statement. Some importers pay duties on each individual entry summary, resulting in per-entry payments that are easier to trace.

Customs broker prepayment. In some arrangements, the customs broker prepays duties and invoices the importer. In this case, AP paid the broker, not CBP directly. The broker’s invoice should itemize the duty components, including any IEEPA surcharges.

The reconciliation challenge: If you’re on the PMS program or your broker prepaid duties, tracing individual IEEPA surcharge payments back to specific entries requires matching your payment records against the entry summaries. This is where the ES-003 report from ACE becomes essential — it provides the entry-level detail that your bank statements aggregate.

Locating your IEEPA duty payment records

AP needs to pull every payment record related to customs duties for the IEEPA period (February 2025 - February 2026). Here’s where to look:

Bank records

Pull all ACH debits from USCBP or US CUSTOMS during the IEEPA period. For PMS payers, the monthly debit includes all duty types — standard MFN duties, MPF, HMF, and the IEEPA surcharge. You’ll need the entry-level ES-003 report to separate the IEEPA component from the total.

Broker invoices

If your broker prepaid duties, pull all broker invoices during the IEEPA period. Look for line items that reference:

• “Additional duty” or “surcharge” under HTS 9903
• “IEEPA duty” or “Section 301/IEEPA surcharge”
• Any duty amount that doesn’t correspond to the standard MFN rate for the product classification

Broker invoices may not always clearly label the IEEPA component. Cross-reference invoice amounts against the entry summary to identify the surcharge portion.

General ledger detail

Pull the GL detail for your duty expense account (typically within COGS or a separate import duty account) for the IEEPA period. This gives you the booked amounts that should reconcile to both the bank debits/broker invoices and the ES-003 entry data.

The goal: A master reconciliation that ties every IEEPA duty dollar from your bank account through your GL to a specific customs entry number. This reconciliation is the foundation for the refund processing workflow.

Reconciling duty payments to entry data

This is the core AP task. Here’s the step-by-step process:

Step 1: Get the ES-003 report. Request this from your customs broker or pull it directly from the ACE portal. Filter for entries with HTS 9903.01 and 9903.02 codes — these are the IEEPA surcharge headings.

Step 2: Extract IEEPA duty amounts by entry. For each entry, the ES-003 shows the duty amount assessed under the IEEPA HTS codes. Sum these to get your total IEEPA exposure.

Step 3: Match to payment records. For each entry, identify the corresponding payment in your bank records or broker invoices. If you’re on PMS, this requires matching entry dates to the monthly statement period.

Step 4: Reconcile to GL. Verify that the total IEEPA duties per the ES-003 match the total duty payments in your bank records and the total booked in your GL. Common discrepancies include:

• Timing differences (entry filed in one month, payment debited in the next)
• Broker markup or service fees included in the duty payment
• Currency conversion differences on non-USD invoices
• Estimated vs. actual duty amounts (if entries were filed with estimated duties)

Step 5: Document the reconciliation. Create a working paper that ties every IEEPA entry to a specific payment and GL entry. This document serves as the basis for the receivable recognition and the refund cash application when payments arrive.

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Preparing for incoming refund deposits

When CBP processes refund payments through the CAPE system, the money arrives via ACH credit to the same bank account that originally paid the duties. Here’s what AP needs to prepare:

Bank account verification

Confirm that the bank account on file with CBP is still active and that your company still has control over it. If the account has been closed, changed, or transferred since the IEEPA duties were paid, you’ll need to update the account information with CBP through your broker. Refund payments to a closed account will bounce, creating delays.

Cash application procedures

CBP refund payments may arrive in several formats:

• Single-entry refunds: One ACH credit for one entry. Easy to match.
• Batch refunds: One ACH credit covering multiple entries processed in the same cycle. You’ll need CBP’s payment detail to allocate across entries.
• Refund plus interest: The payment includes both the duty refund and the statutory interest component. These need to be applied to separate GL accounts — the duty refund to clear the receivable, and the interest to interest income.

Create a standard cash application template that captures:

• CBP payment reference number
• Entry number(s) covered
• Duty refund amount
• Interest amount
• Total payment
• Receivable cleared
• Any variance (overpayment or underpayment)

Variance handling

In most cases, the refund amount will match the duty amount on the entry summary exactly. But variances can occur:

• Partial refunds: CBP may refund only the IEEPA surcharge, not other duty components that were assessed. Verify that the refund matches your expected IEEPA amount, not the total duty on the entry.
• Interest calculation differences: Your estimate of statutory interest may differ slightly from CBP’s calculation. Book the actual interest received and adjust the estimate.
• Disputed entries: If CBP denies the refund on a specific entry, the receivable for that entry needs to be written off or escalated to legal for further action.

Vendor credits and pass-through adjustments

If your company’s accounts payable processes included vendor credits, rebates, or adjustments related to IEEPA tariffs, the refund may trigger corresponding adjustments.

Broker fee adjustments

Some customs brokers charged additional fees for IEEPA-related processing — surcharge handling, additional entry line items, and regulatory compliance work. With the tariff invalidated, review whether any of those fees were contingent on the IEEPA tariff remaining in effect. You may be entitled to a credit for services that are no longer required.

Supplier adjustments

If suppliers provided price reductions specifically to offset IEEPA tariff costs (documented in purchase agreements or correspondence), the recovery may trigger an obligation to adjust those concessions. AP should flag any vendor agreements with tariff-related pricing provisions for review by procurement and legal.

Customer refund processing

If your company charged customers a tariff surcharge and decides to pass through a portion of the recovery, AP may need to process outbound credits or refund payments to customers. This is a policy decision that should be made by management and legal, but AP will be responsible for execution. See the in-house counsel guide for the legal framework on downstream claims.

Internal controls for IEEPA refund processing

IEEPA refunds are a nonstandard transaction. Your existing internal controls may not cover them adequately. Here’s what to put in place:

Segregation of duties. The person who reconciles the refund should not be the person who applies the cash to the receivable. The person who approves vendor credits related to the recovery should not be the person who processes them.

Authorization matrix. Refund cash application above a threshold amount should require supervisory approval. Any variance between expected and actual refund amounts should require review and documentation before the receivable is cleared.

Reconciliation sign-off. The master reconciliation between ES-003 data, payment records, and GL entries should be reviewed and signed off by the controller or designee.

Audit trail. Maintain a complete paper trail from the original duty payment through the recovery filing to the refund receipt. Every step should be documented with dates, amounts, and responsible parties.

Fraud prevention. Be alert for fraudulent refund claims or phishing attempts related to IEEPA recovery. Verify that any refund payment comes from a legitimate CBP ACH source. Do not respond to unsolicited communications claiming to represent CBP’s refund processing.

AP’s role in the recovery timeline

Here’s how AP fits into the overall IEEPA recovery timeline:

The initial assessment and reconciliation work is front-loaded — it takes 2-3 weeks of focused effort. After that, the AP role shifts to monitoring for incoming refund deposits and processing them as they arrive. The CAPE system processes refunds on a rolling basis, so deposits may arrive over a period of months or years depending on your filing dates and queue position.

Common questions from AP teams

“Who receives the refund — us or our broker?” The refund goes to the importer of record, not the customs broker. If your broker prepaid duties on your behalf, the refund still comes to the IOR. However, check your broker agreement — some arrangements may require the IOR to remit the refund to the broker if the broker originally advanced the funds.

“Do we need to issue 1099s for the refund?” No. The refund is a return of previously paid duties, not income from a third party. However, the interest component may have tax implications that your tax team should review.

“What if our bank account has changed?” Update your CBP payment information through your broker immediately. Use ACE to verify the current bank account on file. Refunds sent to a closed account will be returned to CBP, creating processing delays.

“How do we handle refunds that span fiscal years?” The original duty was expensed in the year paid. The refund is recognized in the year received (or booked as a receivable when recognition criteria are met). Your controller and auditor will determine the appropriate period for recognition. See the controller’s receivable guide for the detailed accounting treatment.

Handling multiple refund scenarios

Not every IEEPA refund will follow the standard pattern. AP should be prepared for these variations:

Partial refunds. CBP may process some entries within a filing batch faster than others. You might receive a refund on 30 out of 50 entries in a given month. Each refund must be matched to its specific entry — don’t assume that a partial payment represents a proportional refund across all pending entries.

Returned payments. If a refund payment bounces because of a bank account change, it returns to CBP and re-enters the processing queue. This can add months to the timeline. Verify your banking information proactively.

Refunds on protested entries. When a protest is approved, the refund may include both the IEEPA duty and the statutory interest, but the payment timing and format may differ from PSC refunds. Your broker will receive notification of protest disposition — make sure that notification flows to AP for cash application.

CIT judgment payments. If entries are recovered through CIT litigation, the payment process is different from administrative refunds. Court-ordered refunds may come from the Department of Justice rather than CBP, with different payment reference formats. Coordinate with legal on how to expect and process these payments.

Immediate capital receipts. If your company assigns claims for immediate capital, the payment comes from the claim buyer, not from CBP. This is a completely separate transaction from the government refund. Process it as a receivable collection from a third party, not as a government refund. The GL coding may differ — see the controller’s guide for the specific journal entries.

Coordination with tax department

AP processes the cash, but the tax department needs specific information about the IEEPA refunds:

Identify the original deduction year. For each refund received, flag the tax year in which the corresponding duty was originally deducted. The tax team needs this to determine whether the tax benefit rule applies.

Separate principal from interest. Every refund that includes statutory interest must have the principal and interest amounts identified separately. They have different tax treatment. If CBP’s payment detail doesn’t clearly separate them, work with your broker to reconstruct the split.

Track cumulative receipts by tax year. Maintain a running total of IEEPA refund receipts by fiscal year. The tax team needs this for estimated tax payments and annual return preparation.

Provide 1099 data if needed. While IEEPA refunds from CBP don’t generate 1099s, any immediate capital payments from third-party claim buyers may have reporting requirements. Confirm with your tax advisor.

Getting started

AP’s first action is simple: pull the payment records. Every customs duty payment your company made between February 2025 and February 2026 needs to be identified, isolated, and organized. Start with your bank statements and broker invoices. Then request the ES-003 report from your broker to get the entry-level detail for matching.

If you want the complete analysis done for you — entry-level IEEPA duties, liquidation status, recovery path mapping, and estimated refund amounts — request an Impact Assessment. It provides the data AP needs in a format that’s ready for reconciliation.

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