March 24, 2026

IEEPA Tariffs Are Dead. Enforcement Risk Is Not.

Jonny Frank, Laura Greenman, Jerry McAdams StoneTurn + Follow Contact LinkedIn Facebook X Send Embed In March 2026, the Supreme Court of the United States struck down tariffs imposed under the International Emergency Economic Powers Act (IEEPA), creating significant refund opportunities for importers—but not eliminating enforcement risk. Refund claims now trigger scrutiny of past classifications, valuation decisions, financial reporting, and disclosures, with heightened exposure under the False Claims Act, securities laws, and contractual obligations. This article identifies seven key risk areas companies must manage as the compliance burden shifts from paying tariffs to defending refund claims under oath.

The Supreme Court’s invalidation of the International Emergency Economic Powers Act (“IEEPA”) tariffs seems simple: importers win, tariffs fall, billions of dollars of refunds follow. But that narrative is incomplete —and potentially very dangerous.

Importers can seek refunds through various methods.

• Post-Summary Correction (“PSC”) allows importers to amend the entry to remove the unlawful tariff and request a refund from US Customs Border Protection (“CBP”). These are transaction-specific; that is, the importer must file amended entries for each import.
• Administrative Protests. When CBP “liquidates” an entry (finalizes the duty after 300 days), the importer has 180 days to file a protest seeking correction or refund. The protest asks CBP to reliquidate the entry without the unlawful tariff and refund the difference. The protests are entry-specific and the CPB has two years to decide.
• US Court of International Trade (“CIT”) . Many companies have already filed lawsuits in the Court of International Trade seeking refunds, claiming that the tariffs were an unlawful exaction. Some importers filed protective complaints in the CIT to preserve refund rights in case administrative remedies fail and avoid missing statutory deadlines tied to liquidation or protests. Just before issuing this alert, CIT Judge Richard Eaton in Atmus Filtration, Inc. v. United States (Ct. Int’l Trade Mar. 4, 2026) ordered CPB to stop treating IEPPA tariffs as valid, finalize import entries without the tariffs and refund the difference. Commentators expect the government to appeal.
• S. Court of Federal Claims (“CFC”). Separate from the CIT, importers can file suit in the CFC, arguing that the government illegally collected money through tariffs later found to be unlawful. High Burden Whatever the Route.

The compliance burden has expanded — from paying tariffs to pursuing refunds. And in high-dollar recovery environments, government enforcement risk increases, including from an active and well-incentivized False Claims Act bar.

Practical Action #1: Set Up a Legal/Trade Compliance Team.

Companies need legal counsel to preserve refund rights and trade compliance risks and controls experts to ensure clean data for submitting refund claims. An integrated legal/trade compliance team optimizes the refund process and mitigates enforcement headaches

Here are seven principal risk areas to consider:

• Refund certification and False Claims Act exposure;
• Timing and recovery uncertainty;
• Financial reporting;
• Disclosure;
• Contracts and consistency;
• Third-party consultants; and
• New and emerging risks. Each warrants attention and action.

Refund Claims Are Not Administrative Formalities
A tariff refund claim is not a routine filing. It is a representation about historical conduct. Misrepresentations to the government, for whatever reason, have consequences.

Companies seeking reimbursement will need to demonstrate they:

• Paid tariffs.
• Properly classified goods.
• Correctly described the country of origin.
• Accurately valued the goods.
• Are not seeking duplicative recovery.
• Did not make material misstatements in prior filings. Each of those elements invites scrutiny of historical customs compliance.

Consider what that means in practice. Many companies made classification decisions under time pressure. Ambiguities were resolved in good faith but without litigation in mind.
Transfer pricing decisions have evolved. Documentation may reflect uncertainty rather than clarity.

Now, companies must revisit those decisions with financial recovery at stake. The temptation is predictable: reinterpret ambiguity in favor of eligibility; recharacterize uncertain classifications as settled; and minimize documentation gaps.

If those representations are inaccurate, the False Claims Act becomes relevant. The False Claims Act does not require proof of intent to defraud. Actual knowledge, reckless disregard, or deliberate ignorance are sufficient.

Moreover, high-dollar refund environments attract whistleblowers. Employees who disagree with aggressive recovery strategies have both a platform and an incentive.

Consider the following: A CFO learns that the company may be entitled to a $200 million refund. The board is enthusiastic. Analysts are modeling margin expansion. Internal teams receive instructions to “be aggressive but reasonable.”

Trade compliance revisits prior classifications that were once debated internally. An old email surfaces: “This is defensible, but not free from doubt.”

That ambiguity now matters. Outside consultants calculate a larger recovery based on a revised interpretation of country-of-origin treatment. The numbers look compelling. The pressure to file increases quickly.

The question is no longer simply whether the company can maximize recovery. It is also whether it can defend under oath the certifications that accompany the claim with the benefit of hindsight. That is the inflection point where the refund strategy becomes an enforcement risk.

Practical Action #2: Conduct a Pre-Claim Risk Assessment and Root Cause Review
Before filing any refund claim, companies should treat the process as if preparing for government scrutiny. That means:

• Reconstructing the original decision-making process for tariff classification.
• Identifying prior internal debates or ambiguity.
• Reconciling refund calculations to contemporaneous documentation.
• Documenting areas of uncertainty rather than smoothing them over. Timing Risks Are Real.

Proceedings before the Court of Federal Claims (CFC) can extend for years. Public commentary suggests the process could take years — possibly five or more.

Embedding overly optimistic recovery assumptions into baseline budgets is a planning error. Besides timing, companies should consider the possibility of partial recovery and adverse precedent.

Practical Action #3: Model Conservative Scenarios

Organizations should:

• Develop conservative, moderate, and aggressive recovery cases.
• Assess liquidity impact under each.
• Avoid using optimistic cases as baseline projections.
• Communicate uncertainty transparently to boards and lenders. Contingent Gain— Or Earnings Management? The accounting implications are equally consequential. Under U.S. GAAP, contingent gains are not recognized until realization is probable and reasonably estimable. Litigation-dependent recoveries typically fail to meet that threshold.

But earnings pressure is real. Analysts may anticipate improved margins. Boards may view refund prospects as a corrective to prior compression.

Premature recognition creates layered risk:

• Securities litigation if recovery is delayed or reduced.
• Auditor conflict over financial statement accuracy.
• Regulatory scrutiny of revenue recognition practices.
• Reputational damage if forecasts prove overly optimistic. Reserve releases pose a related concern. Some companies established reserves to account for tariff uncertainty. Releasing those reserves in strategically convenient quarters may appear opportunistic, even if technically arguable.

Practical Action #4: Formalize the Accounting Analysis
Prepare a comprehensive accounting memorandum that:

• Assesses probability of recovery.
• Evaluates timing uncertainty.
• Models partial recovery scenarios.
• Articulates disclosure obligations.
• Documents management’s judgment contemporaneously. Disclosure Risk: When Optimism Races Probability Public companies face disclosure issues. If tariffs previously explained margin compression, refund prospects may appear material. But materiality depends on probability and magnitude, not optimistic expectations.

Inconsistent messaging between internal forecasts, investor calls, and refund submissions creates fertile ground for securities litigation. For example, if management internally models a 90% recovery probability while publicly characterizing recovery as uncertain—or vice versa—plaintiffs’ lawyers will notice.

Insider trading risk also increases. Executives with internal recovery estimates possess enticing material nonpublic information.

Practical Action #5: Recalibrate Disclosure Controls
Companies should:

• Convene disclosure committees promptly.
• Align internal forecasting assumptions with public statements.
• Revisit risk factor language.
• Reinforce blackout periods during claim preparation and litigation. Contract and Consistency Risk

Tariff pass-through provisions are common: customers paid surcharges; suppliers renegotiated pricing, and contracts allocated risk in different ways.

The fall of the IEEPA Tariffs may test those allocations. Customers might seek reimbursement of tariff surcharges. Suppliers might assert offset rights. Litigation positions might conflict with refund arguments.

Consider consistency risk. Companies arguing before the CFC that tariffs were embedded in cost cannot credibly argue to customers that no surcharge was passed through.

Practical Action #6: Conduct a Cross-Functional Consistency Review
Companies, together with their lawyers and advisers, should review:

• Tariff-related contract language.
• Historical surcharge invoicing practices.
• Communications to counterparties.
• Refund positions contemplated in litigation. Third Party Consultant Risks High-value refund environments predictably attract contingency-fee consultants. Many bring expertise. Some bring maximalist interpretations.

Fee structures tied solely to recovery size distort incentives. The risk is subtle: aggressive interpretations may feel justified when aligned with compensation.

Practical Action #7: Separate Advocacy from Oversight
Boards, audit committees or executive management should:

• Oversee refund strategy.
• Require independent validation of calculations.
• Ensure internal audit testing of documentation.
• Maintain separation between claim preparation and control evaluation. New and Emerging Risks The Supreme Court’s decision will not benefit all sectors equally. Import-heavy businesses may improve margins. Domestic producers previously shielded by tariffs may face renewed competitive pressure.

Financial stress correlates with misconduct risk. Revenue acceleration, channel stuffing, optimistic valuation assumptions, and inventory manipulation frequently appear during margin compression.

Regulatory contraction does not eliminate pressure. In some sectors, it intensifies it, particularly in those with compressed margins, historically a fertile ground for aggressive accounting and misconduct.

Practical Discipline #8: Update Enterprise Risk Assessment
Companies facing competitive disruption should:

• Test revenue recognition controls.
• Scrutinize inventory valuation methodologies.
• Stress-test impairment assumptions.
• Align executive compensation metrics with sustainable performance rather than short-term optics. *** * ***

The Supreme Court removed a tariff regime. It did not remove enforcement risk. If anything, it relocated risk—from the point of payment to the point of recovery.

How companies manage that transition will determine whether this decision becomes a case study in disciplined governance or an example of hindsight regret.

In high-visibility, high-dollar environments, compliance and integrity are not simply ethical virtues. They are strategic assets which, in high-visibility, high-dollar environments, spell the difference between recovery and an investigation target.

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