Feds have rejected 15% of businesses' tariff refund claims – Image for illustrative purposes only (Image credits: Unsplash)
U.S. Customs and Border Protection processed thousands of tariff refund applications in the first week after launching its online portal, but federal officials denied about 15% of them.[1][2] The rejections stemmed largely from technical errors and eligibility issues as importers rushed to recover duties ruled unlawful by the Supreme Court. Businesses now have a chance to correct mistakes and resubmit, with the first refunds expected within weeks.
Launch of the CAPE Portal Sparks High Volume of Claims
Customs and Border Protection introduced the Consolidated Administration and Processing of Entries system, or CAPE, on April 20. The portal allows importers of record and authorized brokers to upload claims via the Automated Commercial Environment secure data portal.[3] By April 26, the agency received more than 75,000 refund requests covering millions of import entries subject to duties imposed under the International Emergency Economic Powers Act.
Over 47,000 claims passed initial filing checks, encompassing some 11 million tariff payments. Out of 13.3 million entries that cleared a preliminary review, officials approved about 1.74 million for further processing while denying the rest.[1][2] The Supreme Court’s February decision invalidated these levies, opening the door to refunds totaling around $166 billion across affected importers.
Common Reasons Behind the 15% Rejection Rate
Most denials occurred during “entry-specific validations,” where submissions failed basic requirements. CBP identified issues such as improperly formatted data in CSV files, corrupted uploads, or claims filed by parties other than the importer of record or their designated broker.[2][3]
Entries also needed to meet phase one criteria, including unliquidated status or liquidation within the prior 80 days. Nick Richards, a partner at law firm Greenspoon Marder who advises on tariff refunds, attributed many rejections to businesses submitting outside these parameters. “There are parameters, and I would imagine some of the submissions are outside of that scope,” he said.[1]
- Invalid filer (not importer of record or authorized broker)
- CSV file errors or corruption
- Ineligible entries (e.g., liquidated too long ago)
- Missing bank details for ACH refunds
- Entries under review or suspended
Overcoming Early Challenges and Next Steps
The portal experienced minor disruptions at launch, including an 18-minute pause for resource reconfiguration and reports of high-volume errors. Some small business owners, like Beth Benike of Busy Baby in Minnesota, faced account hurdles such as duplicate tax ID alerts that required extended hold times with CBP support.[1][4] Despite these, Richards praised the rollout. “I was amazed at the speed with which Customs put up this portal… They’ve done an amazing job,” he noted.
Importers can view rejection reasons in their ACE portal accounts and refile corrected declarations, limited to 9,999 entries per CSV upload. Approved claims trigger liquidation or reliquidation, with refunds issued via direct deposit after 60 to 90 days in most cases. The first batch heads out around May 11.[3]
Key Takeaways for Businesses:
– Verify ACE portal account and ACH enrollment before filing.
– Use the official CSV template; test small batches first.
– Limit phase one claims to eligible entries only.
– Monitor status regularly and refile promptly on rejections.
Timeline and Broader Implications
Phase one focuses on readily processable entries, with future expansions planned. CBP consolidates refunds by importer rather than per entry, netting any over- or under-payments. Funds may offset prior debts if applicable.
Small and medium importers stand to gain most, as larger firms often absorbed costs into pricing. Benike estimated her company awaits $50,000, a sum that could ease ongoing pressures from past duty hikes. Successful navigation of CAPE promises relief, though patience remains essential amid the volume.
Businesses should consult CBP’s guidance for precise steps. With processing underway, eligible claimants eye quicker cash flow in the coming months.
