CFOs Face Tricky Tariff Refund Questions as Process Gains Steam

In a recent article published by CFO Dive, the federal government’s tariff refund process is explored with CFOs facing many questions about the process and payments, including insight from UHY Consulting Principal Charles Clevenger and Partner Ali Baydoun.

The federal government’s tariff refund process is exceeding many industry observers’ early expectations, even as CFOs confront tricky questions around payments now flowing through the system.

Early fears that U.S. Customs and Border Protection’s tariff refund portal would buckle under volume or become bogged down in documentation requirements have largely not materialized, accounting, tax and customs advisers told CFO Dive.

Instead, attention is shifting from early operational concerns to questions about how companies will account for and manage payments. This comes as the government says it has already processed billions of dollars in claims.

Rapid process

CBP launched an online portal on April 20 to accept claims from businesses for refunds tied to tariffs that were struck down by the U.S. Supreme Court in February.

In a May 12 court filing, the agency said it had processed $35.46 billion in refunds including interest as of May 11. More than 15 million entries, including those that have gone through to refund, have been validated, the filing said.

A key hurdle in the refund process is getting data entry right when submitting claims through the portal, according to Charles Clevenger, a principal at audit and tax consulting firm UHY. While the process is generally functioning as intended, many early wrinkles stem from data inconsistencies within company submissions rather than systemic failures, he said.

“Where there has been maybe a rejection, it’s been really around the data itself and getting it right so that the records for the refund request match with the original tariff records,” Clevenger said. “As long as those things match and companies are following the prescribed process, we’re not seeing any issues.”

Accounting, tax questions emerge

Meanwhile, as refunds begin flowing, a more complex set of issues is emerging.

Recent disclosures in earnings calls have raised questions about whether companies should recognize claimed — but not yet received — tariff refunds for accounting purposes.

“To the extent that you have some certainty about the amounts and what you’re getting, there is no preclusion from recording them,” said Ali Baydoun, a partner at UHY. “It’s about getting to that level of comfort where you’ve done enough to feel very certain about those amounts, and you’re not kind of jumping the gun.”

Premature booking of anticipated refunds may come with risks, Baydoun warned. “You don’t want to over-promise and under-deliver,” he said.

Read the full article published by CFO Dive.