Accounting for customs duty refunds: what fixes the amount, when cash arrives and what can reduce it, by route

Why does the refund route decide the accounting?

A finance team usually hears about a customs refund twice: once when the audit finds the overpayment ("about $40,000 across twelve entries") and once when money lands in the bank, often months later and rarely at the same figure. Between the two, the amount moves through a legal process that differs by route. Each route has its own event that turns an estimate into an amount the government owes, its own payment deadline, its own interest rule and its own ways of coming in lower than expected.

This page sets those facts out by route so the accounting question can be asked against the right event. It does not say how to book anything. Treatment under your accounting framework and your tax position depends on facts this page cannot see; confirm both with your accountant or tax adviser. What it does give you is the customs document that answers each question they will ask.

The routes themselves, and which finding goes to which, are on how to recover overpaid import duty. IEEPA refunds run through CBP's CAPE process and are covered on IEEPA refunds: which entries qualify.

When is the refund amount fixed, and when does the cash arrive?

IEEPA duties are left out of the table on purpose: they are refunded through CAPE on rules of their own, set out on the IEEPA page linked above.

Three points come out of the table that finance teams often miss.

Filing is not the event. A filed PSC, protest or claim is a request. The amount is fixed by the liquidation or reliquidation that follows, and that date is posted on cbp.gov as a liquidation notice. For an entry that is unliquidated when the PSC is filed, CBP's normal cycle is about 314 days after entry, according to its PSC guidance, so a PSC filed in month three can take another seven months to become cash.

The 30-day rule has teeth. If CBP does not pay within 30 days of liquidation or reliquidation, delinquency interest under 1505(d) accrues on the unpaid refund. That stops if the only reason for non-delivery is missing banking information (19 CFR 24.36(a)(3)), which is a reason to check the ACH set-up before a large refund is due.

Drawback behaves differently. The amount is 99 percent of eligible duties, taxes and fees (or 99 percent of the lesser of two amounts on substitution claims, 19 U.S.C. 1313(l)(2)), no interest is added, payment is due within 90 days of the claim's liquidation rather than 30, and accelerated payment is an advance against the claim backed by a bond. Duty drawback on past entries explains how the amount is built.

How is the interest worked out, and why keep it separate?

Interest on a refund is a separate amount from the duty, computed by CBP at liquidation. 19 CFR 24.36(a)(1) gives the rule: interest on excess money deposited runs from the date of deposit (for a 1520(d) claim, from the date the claim is filed) to the date of liquidation or reliquidation. Where an additional deposit was made before liquidation and part of it was excess, interest on that part runs from the date of the additional deposit.

The rate is the IRS overpayment rate under 26 U.S.C. 6621 for each quarter, which CBP publishes in the Federal Register. For the quarter from October 1, 2026, CBP's notice gives 6 percent for corporations and 7 percent for non-corporations (91 FR 60141); the same notice shows the corporate rate at 6 percent from January 1, 2025 to March 31, 2026, 5 percent from April 1 to June 30, 2026, and 6 percent again from July 1, 2026.

Keep the interest on its own line from the start. It is computed on a different basis from the duty, it arrives on a different legal footing, and your accountant and tax adviser will each want to see it separately. The deposit will not split it for you: CBP's IEEPA refund guidance says the amount paid for an entry is the refunded duty plus interest, netted with anything owed on the entry, with no separate interest payment. The split is on the liquidation reports: for a liquidation that changes the amount, the ES-701 Courtesy Notice of Liquidation and ES-702 Official Notice of Extension, Suspension and Liquidation reports in ACE show the refund or bill together with its interest. The same applies in the other direction: interest CBP bills on an underpayment, such as on a post-summary correction that increases duty, is a separate charge from the duty itself.

Who receives the refund, and how?

By default, CBP certifies refunds to the importer of record (19 CFR 24.36(b)). Two documents redirect them:

• CBP Form 4811 names another party, often the broker, to receive refunds, bills and notices. A Form 4811 is not effective if no customs transaction using the owner's importer number has been made within three years of filing it, or if no unliquidated entry is on file for that number (24.36(a)).
• A protest can include a statement directing refunds on the protested entry to a named agent, which supersedes any existing Form 4811 for that entry (19 CFR 174.13(c)).

Since February 6, 2026, CBP issues refunds only electronically, except where a waiver applies under 31 CFR 208.4 (CBP Dec. 25-18, 91 FR 21). Importers not already enrolled must complete the ACH Refund application in the ACE Portal, with a US bank account; a third party designated on Form 4811 must complete its own application, and if it is not an ACH participant the refund defaults to the importer's account. A refund certified while no banking information is on file is rejected.

For finance, the question to settle before a large refund is due is simple: whose bank account will it land in? If the answer is the broker's, the refund passes through the broker's books before yours, and the remittance you see may already be net of the broker's invoices.

What can reduce the refund before it reaches you?

Three things, each with its own document trail:

1. Netting inside the entry. A PSC replaces the whole entry summary, and a reliquidation settles the whole entry. If the audit found an underpaid line on the same entry, the refund is the net. The liquidation notice and the bill or refund record show the net figure, not the line-by-line gross.
2. Set-off against debts owed to CBP. Under 19 CFR 24.72, when an importer has a claim allowed against the United States and owes the United States a legally fixed and undisputed debt, CBP sets off the claim against the debt. An unpaid supplemental duty bill on another entry is the usual example.
3. Treasury offset for debts owed elsewhere. 31 CFR 285.5 makes federal payments, including refunds, eligible for centralized offset through the Treasury Offset Program to collect delinquent, legally enforceable nontax debts owed to federal agencies.

When a refund arrives short, reconcile it to the liquidation record first, then to any open CBP bills, and only then treat the difference as unexplained. ACE gives the trail: CBP's IEEPA refund guidance describes the REV-603 Trade Refund Report, which shows an entry's refund as "Sent to Treasury" and then "Treasury issued", and marks a refund diverted to an existing bill as "Funds Diverted" in its Refund Secondary Status column. The REV-613 report lists refunds rejected because no ACH Refund enrollment is on file.

What will your accountant ask, and which customs record answers it?

On tax, this page states only the rules that exist, not how they apply to you. 26 U.S.C. 111 provides that gross income does not include the recovery of an amount deducted in a prior year to the extent the deduction did not reduce tax; the recovery of duty and the interest paid on it are separate amounts. How either is treated depends on how the duty was treated when it was paid. That is a question for your tax adviser.

How do three refunds in one quarter look side by side?

An illustrative quarter, with invented figures. An audit in September 2026 found three overpayments:

• Entry A, entered June 2026, overpaid $4,800. PSC filed September 15, 2026. The entry is scheduled to liquidate in April 2027; the refund and interest from the June deposit date arrive within 30 days of that. Until then it is a claim under process, not a fixed amount.
• Entry B, liquidated July 2026, overpaid $6,100. Protest filed October 2, 2026. CBP has until October 2, 2028 to decide. If allowed, reliquidation fixes the amount; refund and interest from the original deposit date follow within 30 days.
• Entry C, goods imported in February 2026 and re-exported unused in August 2026, duty paid $9,000. Drawback claim filed November 2026 for 99 percent, $8,910, with no interest. Without accelerated payment, the cash arrives within 90 days after the claim liquidates; with it, earlier, as an advance that CBP can recover if the liquidated amount is lower.

Three overpayments of similar size, three different dates on which the amount becomes fixed, and only two of them carry interest. That is why a single "customs refunds receivable" line with one recognition rule usually needs splitting.

Where does the audit fit?

A line-level audit is the source of the first estimate: which entries, which lines, how much, in which direction, and which route each is on. TariffSense reads entry summaries and broker entry exports, checks every line against the rules in force on its entry date and returns each finding with the declared and corrected duty, the direction and the entry's liquidation status, which is what finance needs to tie a refund estimate to its route. The post-entry audit page shows what comes back, and the post-entry audit pillar lists the checks. The filings, and the bookkeeping, stay with your broker and your finance team.

What should you do next on your own entries?

List every open refund by route with its entry number, the amount claimed and the event that will fix it (liquidation date, protest filing date, drawback claim date). Confirm that the ACH Refund application is complete in the ACE Portal for the importer of record and for any party on a Form 4811. Check for unpaid CBP bills that would be set off. Then take the list, with principal and interest separated, to your accountant before the first refund lands.