When two companies merge or one acquires another, everything gets complicated — contracts, employees, real estate, intellectual property. Add IEEPA tariff refund claims worth potentially millions of dollars, and you’ve got another line item that needs careful handling in the transaction. These claims are real assets with real value, and how they’re treated in an M&A context determines who gets paid and how much.
Since the Supreme Court struck down IEEPA tariffs in February 2026, every company that paid these duties between February 2025 and February 2026 has a claim against the government. For companies involved in mergers, acquisitions, or divestitures during or after that period, the question becomes: who owns the claim, and what happens to it through the transaction?
The answer depends on the deal structure, the timing, and whether anyone thought to address IEEPA claims in the transaction documents.
The Basic Rule: Claims Follow the IOR
The fundamental principle is straightforward: the right to an IEEPA tariff refund belongs to the importer of record on the original entry summary. The IOR is the entity that CBP recognizes as the party responsible for the imported goods — and the party entitled to receive any refund of duties paid on those goods.
In an M&A context, what happens to the IOR determines what happens to the IEEPA claims.
Stock/Equity Acquisitions
In a stock acquisition (or merger by exchange of equity), the acquiring company purchases the target’s shares. The target company continues to exist as a legal entity — it just has a new owner. Because the target entity survives, its IOR status is unchanged. The IEEPA claims remain with the target entity, which is now a subsidiary of the acquirer.
Practical impact: The claims stay where they are. The new parent company controls them through its ownership of the subsidiary, but no transfer of claim rights is needed. The subsidiary files for recovery under its own IOR number just as it would have before the acquisition.
Watch out for: Integration decisions that eliminate the subsidiary. If the acquirer dissolves the target entity post-closing and merges operations into the parent, the IOR number goes away. The claims need to be filed before dissolution — or the successor entity needs to establish continuity with CBP.
Asset Acquisitions
In an asset acquisition, the buyer purchases specific assets of the target — inventory, equipment, customer contracts, intellectual property. The target entity continues to exist (at least temporarily) and retains anything not explicitly transferred.
Here’s where it gets tricky: IEEPA refund claims are not typically listed as a transferred asset unless someone specifically identifies them. If the purchase agreement doesn’t include language covering “customs refund claims” or “government receivables,” the claims likely stay with the seller.
This means the target company (or its owners) retains the right to recover IEEPA duties — even if the buyer now owns the inventory that those duties were paid on.
Practical impact for buyers: If you acquired a company’s import business through an asset deal, you may not have acquired the IEEPA refund rights. Check your purchase agreement. If the claims weren’t transferred, you’ll need a post-closing assignment or amendment.
Practical impact for sellers: If you sold your import business but retained the entity, you may still own valuable IEEPA claims. An Impact Assessment can quantify what they’re worth.
Mergers (Statutory Merger)
In a statutory merger, one entity merges into another and ceases to exist. The surviving entity succeeds to all rights, obligations, and liabilities of the merged entity — including customs-related rights.
Practical impact: The IEEPA claims transfer to the surviving entity by operation of law. No separate assignment is needed. However, the surviving entity will need to update its records with CBP and may need to demonstrate successor status when filing for recovery.
Timing Matters: When Did the Deal Close?
The timing of the transaction relative to the IEEPA period and the recovery process affects how claims should be handled.
Deal Closed Before February 20, 2026 (Before the Ruling)
If the M&A transaction closed before the Supreme Court ruled IEEPA tariffs unconstitutional, the IEEPA claims may not have been explicitly valued or addressed in the deal. At the time of closing, there was no certainty that tariffs would be struck down — the claims were contingent at best.
For stock deals: The claims are now an unexpected windfall for the acquirer, who owns the target entity and its refund rights. Whether the seller has a claim to share in that windfall depends on whether the purchase agreement included provisions for post-closing adjustments or contingent assets.
For asset deals: The claims almost certainly weren’t transferred (since they were speculative pre-ruling). The seller likely owns them. This could create awkward situations where the seller wants to file for recovery using data that the buyer now controls.
For deals with earn-out provisions: If the purchase price included an earn-out based on financial metrics, the IEEPA refund could materially affect the earn-out calculation. Was the tariff cost reflected in the baseline financials? Will the refund be treated as revenue or a one-time adjustment? These questions need to be addressed before filing.
Deal Closed After February 20, 2026 (After the Ruling)
If the transaction closed after the ruling, IEEPA claims should have been explicitly addressed in due diligence and in the purchase agreement. The claims have a quantifiable value — they’re receivables from the federal government, backed by a Supreme Court ruling.
For deals currently in diligence: If you’re in the middle of an M&A transaction and the target has IEEPA claims, those claims should be valued in the deal model. The ASC 450 framework provides guidance on how to classify and value these receivables on the target’s balance sheet.
A target company’s IEEPA claims can be significant. For a $50 million importer with 25% of goods subject to IEEPA tariffs, the claims could be worth $2.5-$4 million or more. Ignoring them in due diligence is leaving money on the table — for either the buyer or the seller, depending on which side identifies them first.
The Due Diligence Checklist for IEEPA Claims
If you’re evaluating a target company that imported goods during the IEEPA period, here’s what to verify:
| Diligence Item | Why It Matters |
|---|---|
| IOR number(s) | Confirms which entity holds the refund rights |
| ES-003 report from ACE | Shows total IEEPA duties paid |
| Liquidation status of entries | Determines available recovery paths |
| 180-day protest deadlines | Identifies time-sensitive claims |
| Any claims already filed | Shows if recovery is in progress |
| Customs broker relationships | Identifies who holds the data |
| Third-party IOR situations | Some entries may have been filed under a freight forwarder or 3PL’s IOR |
| DDP supplier arrangements | Duties paid by suppliers aren’t the target’s claims |
| Multiple entity structure | Subsidiaries may have separate claims |
Scenario: The Mid-Deal Discovery
Let me walk through a real-world scenario. A private equity firm — call them Ridgeline Capital — was acquiring a consumer products company, Pinnacle Brands, through a stock purchase. The deal was signed in January 2026 (before the ruling) with a closing date of April 2026.
During the period between signing and closing, the Supreme Court ruled IEEPA tariffs unconstitutional. Pinnacle Brands had paid approximately $6.2 million in IEEPA duties during the tariff period.
Ridgeline’s deal team realized they needed to address the IEEPA claims before closing. The questions on the table:
Should the claims be included in the purchase price adjustment? The original deal valued Pinnacle based on financials that included the IEEPA tariff cost as an expense. With the ruling, those costs were now recoverable — effectively turning an expense into a receivable. Ridgeline argued the claims should be excluded from the purchase price (i.e., Pinnacle’s sellers should retain them). Pinnacle’s sellers argued the claims should transfer with the company at no price adjustment (i.e., Ridgeline would benefit from the windfall).
How should pending refunds be handled? Some of Pinnacle’s entries were unliquidated and eligible for immediate PSC filing. Should the sellers file before closing and keep the refunds? Or should filing wait until after closing and let Ridgeline (as new owner) capture them?
What about the CAPE queue position? Filing early for a strong queue position benefits whoever ends up owning the claims. But filing takes effort and broker coordination — who pays for that work?
The Resolution
Ridgeline and Pinnacle’s sellers negotiated a solution:
- The IEEPA claims were valued at $5.6 million (95% of face value, reflecting some uncertainty on documentation completeness)
- The purchase price was adjusted downward by $2.8 million — splitting the value 50/50 between buyer and seller
- Filing responsibility was assigned to Ridgeline post-closing, with a covenant that Pinnacle’s sellers would cooperate in providing documentation
- A mechanism for sharing any recovery above $5.6 million was included, incentivizing Ridgeline to pursue the full claim
This is one of many possible structures. The key point is that the IEEPA claims were significant enough to affect the deal economics — $6.2 million in claims on a transaction that valued Pinnacle at $45 million represents nearly 14% of enterprise value.
Practical Guidance by Transaction Type
If You’re a Buyer
Due diligence: Quantify the target’s IEEPA claims early. Request the ES-003 data and calculate the exposure. This is a real asset that should be reflected in your valuation.
Purchase agreement: Include explicit language covering customs refund claims, IEEPA-specific refund rights, and any pending protests or filings. Address who has the right to file, who bears the cost, and who receives the proceeds.
Post-closing integration: If you’re dissolving the target entity, file all IEEPA claims before dissolution. Once the IOR entity ceases to exist, the filing process becomes significantly more complicated.
If You’re a Seller
Pre-sale assessment: Get your Impact Assessment done before entering a sale process. Knowing the value of your IEEPA claims strengthens your negotiating position and prevents the buyer from discovering (and claiming) an asset you didn’t price.
Retention vs. transfer: Consider retaining the IEEPA claims in an asset sale. They’re a quantifiable receivable that can be monetized independently — either through government filing or immediate capital through claim assignment.
Cooperation covenant: If you’re transferring the claims, ensure the buyer commits to pursuing them. Claims that aren’t filed within the relevant windows are claims that go unrecovered.
If You’re an Advisor (Legal, Financial, or M&A)
Value the claims. Use the CIT’s March 4 order and CAPE framework as the basis for probability-weighting the recovery. Claims on unliquidated entries are near-certain. Claims on liquidated entries within the protest window are highly probable. Claims requiring CIT litigation are less certain and more costly.
Separate the claims from operations. IEEPA claims can be treated as a standalone asset, separate from the ongoing business. This gives flexibility in structuring the transaction.
Watch the deadlines. If the deal timeline extends beyond protest filing deadlines, address who files during the interim period. Missing deadlines during a transaction is preventable and costly.
The Valuation Question: What Are IEEPA Claims Worth in a Deal?
Valuing IEEPA claims in an M&A context requires a probability-weighted discounted cash flow approach — essentially the same framework used for any contingent asset:
Valuation Framework
| Claim Category | Face Value | Probability of Recovery | Timing (months) | Discount Rate | Present Value |
|---|---|---|---|---|---|
| PSC-eligible (unliquidated) | $X | 95-99% | 2-3 | Low | ~95% of face |
| Protest (within window) | $X | 90-95% | 12-18 | Medium | ~80-85% of face |
| Protest (approaching deadline) | $X | 85-90% | 12-18 | Medium | ~75-80% of face |
| CIT litigation required | $X | 60-75% | 24-48 | High | ~40-55% of face |
| Documentation gaps | $X | 50-80% | Variable | High | Case-by-case |
PSC-eligible claims are nearly certain — the legal basis is clear, the process is administrative, and refunds arrive quickly. These should be valued at near-face.
Protest claims within the 180-day window are highly probable but subject to processing delays through CAPE. The discount reflects the time value of a 12-18 month wait.
Claims requiring CIT litigation carry meaningful uncertainty — higher legal costs, longer timelines, and the possibility of adverse rulings on procedural grounds (even though the substantive legal question is resolved).
Claims with documentation gaps require case-by-case analysis. A missing invoice on a $50,000 entry might be reconstructable from broker records (high probability). A classification dispute on a complex product might require expert analysis (lower probability).
Practical M&A Application
In a deal context, the total claim value is typically calculated as the sum of present values across all categories, then adjusted for a negotiated risk premium. In the Ridgeline/Pinnacle example above, the $6.2M in face-value claims were valued at $5.6M (approximately 90% of face) — reflecting the mix of PSC-eligible, protest-eligible, and uncertain claims in the portfolio.
The negotiated allocation between buyer and seller (50/50 in that case) reflects the parties’ relative bargaining positions and their respective ability to manage the recovery process. In a seller’s market, the seller might retain 60-70% of the claim value. In a buyer’s market with competing bidders, the claims might transfer at full value as part of the enterprise.
The Emerging Secondary Market Angle
There’s another option that’s becoming increasingly relevant for M&A situations: selling the IEEPA claims on the secondary market. Instead of negotiating claim ownership as part of the M&A transaction, the seller (or buyer, depending on timing) can assign the claims to a claim buyer for immediate capital.
This can simplify the M&A negotiation by removing the claims from the deal entirely — the seller monetizes them pre-closing, and the buyer doesn’t need to account for a contingent government receivable. The discount from face value (typically 10-20%) is the cost of this simplicity.
Key Takeaways
IEEPA claims are real assets with quantifiable value. In any M&A context — merger, acquisition, divestiture, or spin-off — they need to be identified, valued, and explicitly addressed in the transaction documents.
The three most common mistakes:
- Not identifying the claims at all — leaving money on the table for whichever side discovers them later
- Assuming claims automatically transfer — they don’t in asset deals unless explicitly included
- Missing filing deadlines during the transaction process — preventable with proper coordination
Whether you’re a buyer, seller, or advisor, the starting point is the same: quantify the IEEPA exposure with an Impact Assessment and incorporate it into the deal structure.
Get your free Impact Assessment →
If you’re in the middle of a transaction — or planning one — the IEEPA claims associated with the target’s import operations could be worth millions. Don’t let them fall through the cracks. Get the data, value the claims, and make sure they’re addressed in the deal. The 180-day protest window doesn’t pause for M&A timelines.
