Methodology

Framework

TariffRefundIQ uses a probability-weighted decision tree to estimate the expected present value of IEEPA tariff refund claims. This is a standard valuation methodology used in litigation finance, insurance, and private equity for pricing contingent assets.

The model defines seven mutually exclusive scenarios, each with three parameters:

• Probability — likelihood this scenario materializes (must sum to 100%)
• Recovery Rate — percentage of the claim face value recovered in this scenario
• Timing — years until cash is received

NPV Calculation

The Expected Value is the sum of all scenario NPVs. This represents the risk-adjusted present value of holding the claim — the minimum price at which a rational seller should be willing to part with it.

Probability Estimates

Our probability estimates reflect analysis of:

• Legal landscape: The 6-3 SCOTUS ruling is decisive, not a squeaker. The legal path to refunds is clear — the uncertainty is in execution, not law.
• Political dynamics: The administration's stated intent to delay (2-5 years), personal attacks on majority justices, and rapid pivot to alternative tariff authorities all signal non-cooperation.
• Historical precedent: Government refund mechanisms for illegally collected fees have precedent (Japanese internment reparations, various tax refund programs), but $166B is unprecedented in scale.
• Institutional mechanics: CBP processing capacity, CIT enforcement powers, Treasury Judgment Fund access, and congressional appropriations dynamics.

We update probabilities as facts change. Pro subscribers are notified when material updates occur — CIT proceedings, congressional action, CBP guidance, or any shift in the political landscape.

Filing Status Adjustments

Recovery rates are adjusted based on how well-positioned the claim is:

What's Not Modeled

• Statutory interest: 19 USC §1505 provides for interest on refunded duties. At current rates, this could add 5-10% to recovery. We treat this as upside to be conservative.
• Legal costs: Litigation costs for maintaining claims are not deducted. These vary by claimant and are best estimated by counsel.
• Tax implications: Refund proceeds may have tax consequences depending on how the original duties were treated. Consult a tax advisor.
• Correlation risk: Scenarios are modeled as independent, but political outcomes may cluster (e.g., admin obstruction makes negotiated settlement more likely).

Apply the Model

Limitations