Findings
For each of the six calendar quarters from April 1, 2020 through September 30, 2021, the operation of the trade or business of a typical employer in agriculture, food processing and agribusiness was partially suspended during the calendar quarter due to orders from appropriate governmental authorities limiting commerce, travel and group meetings due to COVID-19. The findings follow, one paragraph per quarter, in the statutory words; then the standards satisfied; then the records on which the findings rest. The instruments named in each finding are stated, with their dates and operative clauses, in the quarters section above.
The second quarter of 2020
During the calendar quarter beginning April 1, 2020 and ending June 30, 2020, the operation of the trade or business of employers in this industry was partially suspended due to orders from appropriate governmental authorities limiting commerce, travel and group meetings due to COVID-19: the stay-at-home and business-closure orders of forty-two States and the District and of every large city; the restaurant, bar and school closure orders of every State; the Department of State's suspension of routine visa services and the closure of USCIS offices; the Department of Homeland Security's H-2A and H-2B rules; Proclamations 10014 and 10052; the State and local plant-closure directions and Executive Order 13917; the farm-housing, field-distancing and plant-operating rules of Washington, Oregon, Kentucky, Michigan, New Jersey, Pennsylvania, Dallas County and North Carolina; the land-border notifications and entry proclamations; and the FFCRA leave mandates (Ex. CA-002; Ex. WA-016; Ex. TX-008; Ex. TX-003; Ex. SEC-20-012; Ex. FED-324; Ex. SEC-20-005; Ex. SEC-20-009; Ex. SEC-20-010; Ex. SEC-20-020; Ex. SEC-20-001; Ex. SEC-20-031; Ex. SEC-20-032; Ex. SEC-20-036; Ex. SEC-10-051; Ex. SEC-20-044; Ex. MET-DFW-018; Ex. ECO-A-020; Ex. FED-170). The suspension was a temporary delay, interruption and termination of more than a nominal portion of the operations, and it would not have occurred but for those orders.
The third quarter of 2020
During the calendar quarter beginning July 1, 2020 and ending September 30, 2020, the operation was partially suspended due to Executive Order 13917 and the CDC-OSHA guidance it enforced; the plant and farm standards of Washington, Oregon, Michigan, North Carolina, Virginia, Kentucky, New Jersey, Pennsylvania, Minnesota and Dallas County; the capacity-limited reopening orders and statewide face-covering orders of every State; the remote and hybrid school orders of the 2020-21 year; the State traveler quarantines and metro checkpoint, quarantine and screening orders; Proclamations 10014 and 10052 and the Department of State's post-by-post resumption; the land-border notifications and the Title 42 order; the FEMA export-allocation rule and the scarce-materials designation; and the FFCRA leave mandates (Ex. SEC-20-001; Ex. SEC-20-028; Ex. AGY-ST-AGRICULTURE-PARKS-WILDLIFE-058; Ex. MI-042; Ex. SEC-20-044; Ex. SEC-10-042; Ex. SEC-10-051; Ex. TX-021; Ex. TX-022; Ex. ECO-B-028; Ex. MET-CHI-019; Ex. SEC-20-010; Ex. AGY-FED-LABOR-IMMIGRATION-061; Ex. ECO-A-024; Ex. ECO-A-016; Ex. ECO-A-066; Ex. FED-170).
The fourth quarter of 2020
During the calendar quarter beginning October 1, 2020 and ending December 31, 2020, the operation was partially suspended due to the winter closure, curfew and capacity orders of California, Illinois, Michigan, Minnesota, Washington, Oregon, New Mexico, Colorado, Pennsylvania, Virginia, Texas and the largest metros; the Cal/OSHA, Oregon OSHA, MIOSHA, Virginia and New Jersey workplace standards; the Washington housing rules as readopted and the Michigan testing order; Executive Order 13917 and the North Carolina and Kentucky plant rules; Proclamations 10052 and 10131; the Title 42 order and the land-border notifications; the FEMA export-allocation rule and the scarce-materials designation; the H-2A rule of December 18, 2020; and the FFCRA leave mandates (Ex. CA-020; Ex. IL-031; Ex. MI-060; Ex. MN-032; Ex. WA-047; Ex. OR-033; Ex. NM-041; Ex. CO-037; Ex. PA-022; Ex. VA-016; Ex. TX-025; Ex. MET-LA-012; Ex. SEC-10-041; Ex. SEC-10-054; Ex. SEC-10-024; Ex. SEC-10-042; Ex. SEC-10-021; Ex. AGY-ST-AGRICULTURE-PARKS-WILDLIFE-059; Ex. MI-042; Ex. SEC-20-001; Ex. SEC-20-011; Ex. FED-037; Ex. ECO-A-067; Ex. SEC-20-007; Ex. FED-170).
The first quarter of 2021
During the calendar quarter beginning January 1, 2021 and ending March 31, 2021, the operation was partially suspended due to the winter closure and capacity orders of the same States and metros to their end dates; the Cal/OSHA, Oregon OSHA, MIOSHA, Virginia and New Jersey workplace standards; the Washington housing rules as readopted January 8, 2021 and the Michigan testing order; the CDC conveyance order and the TSA security directive; Proclamations 10143, 10052 and 10131; the CDC pre-departure testing order; the Title 42 order and the land-border notifications; the FEMA export-allocation rule and the scarce-materials designation; the H-2A rule of December 18, 2020; OSHA's National Emphasis Program; and Executive Order 13917 (Ex. CA-020; Ex. IL-031; Ex. WA-056; Ex. OR-035; Ex. NM-041; Ex. PA-022; Ex. VA-016; Ex. MET-LA-014; Ex. MET-PHL-012; Ex. SEC-10-041; Ex. SEC-10-054; Ex. SEC-10-043; Ex. SEC-10-021; Ex. SEC-20-034; Ex. MI-042; Ex. FED-020; Ex. ECO-B-005; Ex. FED-207; Ex. SEC-20-011; Ex. FED-042; Ex. FED-037; Ex. ECO-A-032; Ex. ECO-A-067; Ex. SEC-20-007; Ex. SEC-10-014; Ex. SEC-20-001).
The second quarter of 2021
During the calendar quarter beginning April 1, 2021 and ending June 30, 2021, the operation was partially suspended due to the Cal/OSHA standard as readopted June 17, 2021; Oregon's agricultural labor housing rule of April 30, 2021 and its permanent workplace rule; Washington's housing rules as revised and readopted; Virginia's permanent standard; the New York HERO Act; the Michigan testing order as re-issued and MIOSHA's rules to June 22; New Jersey's Executive Order 192 to June 4; the capacity, gathering and face-covering orders of every State to their end dates between April 16 and July 1, 2021; OSHA's National Emphasis Program and Healthcare Emergency Temporary Standard; the H-2B supplemental-cap rule and the H-2A rule's window to June 16, 2021; Proclamations 9984, 9992, 10143 and 10199; the CDC conveyance order and TSA directive; the pre-departure testing order; the Title 42 order and the land-border notifications; the FEMA export-allocation rule and the scarce-materials designation; and Executive Order 13917 (Ex. SEC-10-041; Ex. AGY-ST-AGRICULTURE-PARKS-WILDLIFE-053; Ex. SEC-10-055; Ex. AGY-ST-AGRICULTURE-PARKS-WILDLIFE-065; Ex. AGY-ST-AGRICULTURE-PARKS-WILDLIFE-064; Ex. SEC-10-043; Ex. SEC-10-029; Ex. MI-042; Ex. SEC-10-024; Ex. SEC-10-021; Ex. CO-051; Ex. IL-037; Ex. CA-027; Ex. NY-054; Ex. NY-057; Ex. MI-076; Ex. OR-043; Ex. WA-065; Ex. MN-041; Ex. NM-060; Ex. SEC-10-014; Ex. FED-080; Ex. AGY-FED-LABOR-IMMIGRATION-014; Ex. SEC-20-007; Ex. FED-208; Ex. FED-020; Ex. FED-051; Ex. FED-042; Ex. FED-037; Ex. FED-232; Ex. ECO-A-067; Ex. SEC-20-001).
The third quarter of 2021
During the calendar quarter beginning July 1, 2021 and ending September 30, 2021, the operation was partially suspended due to Executive Order 13917; OSHA's revised National Emphasis Program of July 7, 2021; the Cal/OSHA standard as readopted; Oregon's labor-housing and workplace rules and face-covering orders; Washington's housing rules as readopted and its face-covering and vaccination orders; Virginia's permanent standard; New York's HERO Act and its activation; the CDC conveyance order and the TSA security directives; Proclamations 9984, 9992, 10143 and 10199; the land-border notifications of June 23, July 22, August 23 and September 22, 2021; the Title 42 order and its reassessment of August 2, 2021; the pre-departure testing order; the H-2B supplemental-cap rule; the scarce-materials designation as extended July 7, 2021; the federal workforce and contractor orders; the Delta-wave face-covering, gathering and vaccination orders of Nevada, the District of Columbia, Louisiana, Hawaii, Oregon, New Mexico, Washington, Illinois and California; the school and child-care orders of eighteen States and the District; the county and city orders of the producing regions and the markets; the tribal and territorial orders; and the vaccination mandates on the workforce's institutions (Ex. SEC-20-001; Ex. SEC-10-015; Ex. SEC-10-041; Ex. AGY-ST-AGRICULTURE-PARKS-WILDLIFE-053; Ex. SEC-10-055; Ex. SEC-10-056; Ex. OR-048; Ex. AGY-ST-AGRICULTURE-PARKS-WILDLIFE-064; Ex. AGY-ST-AGRICULTURE-PARKS-WILDLIFE-065; Ex. WA-078; Ex. WA-080; Ex. WA-077; Ex. SEC-10-043; Ex. SEC-10-029; Ex. SEC-10-031; Ex. FED-020; Ex. FED-051; Ex. FED-052; Ex. FED-200; Ex. FED-201; Ex. FED-207; Ex. FED-208; Ex. FED-232; Ex. ECO-A-036; Ex. ECO-A-037; Ex. FED-235; Ex. FED-255; Ex. FED-258; Ex. FED-037; Ex. FED-038; Ex. FED-042; Ex. AGY-FED-LABOR-IMMIGRATION-014; Ex. ECO-A-071; Ex. FED-272; Ex. FED-063; Ex. FED-064; Ex. NV-041; Ex. DC-057; Ex. LA-036; Ex. HI-024; Ex. HI-025; Ex. NM-067; Ex. IL-042; Ex. CA-029; Ex. CA-035; Ex. CA-030; Ex. ECO-B-051; Ex. ECO-B-087; Ex. ECO-B-054; Ex. CA-034; Ex. WA-075; Ex. MET-SAC-015; Ex. MET-LA-018; Ex. MET-SFO-071; Ex. MET-CHI-026; Ex. MET-NYC-017; Ex. MET-MSY-029; Ex. MET-STL-021; Ex. MET-KC-002; Ex. MET-CMH-050; Ex. MET-DFW-028; Ex. MET-HOU-038; Ex. MET-SEA-002; Ex. AZ-082; Ex. AGY-TRIBAL-054; Ex. AGY-TERRITORIES-035; Ex. ECO-B-055; Ex. MET-LA-023). The suspension was a temporary delay, interruption and termination of more than a nominal portion of the operations; it would not have occurred but for those orders; and it also continued, because of the orders of 2020 and early 2021 that compelled the dismantling of the industry's food-service channel, labor housing, seasonal recruitment and line configuration, for the period those orders' own phase steps took to reverse it, which had not run on July 1, 2021.
The standards satisfied
The burden and the standard
The employer in a refund suit proves its entitlement by a preponderance of the evidence, and the court redetermines the entire liability de novo.306 The orders on which the findings rest are public records of governmental authorities, published by their issuers and subject to judicial notice under Rule 201, which the court "must" take when "supplied with the necessary information"; the Library supplies it.307 The facts of each employer's operation (its functions, its housing, its transport, its customers, its workforce, the dates and terms of the changes the orders compelled) are within the employer's own records and knowledge, and Q&A-70's substantiation list asks for "any governmental order to suspend the employer's business operations" and the records "the employer relied upon," which this page and the Library supply.
The law
The positions taken in this analysis rest on the statutory text, on Tri-State, on Burrage, Gross, Nassar, Bostock and Abercrombie, on the Notice's own favorable Q&As and on the United States' representations in two federal courts. They carry substantial authority under Treasury Regulation § 1.6662-4(d) many times over and, a fortiori, a reasonable basis under § 1.6662-3(b)(3); no accuracy-related penalty can attach to a position held with reasonable cause and in good faith under section 6664(c); the erroneous-claim penalty of section 6676 does not reach a claim made with reasonable cause; and no position on the meaning of a governmental order appears on the Secretary's list of frivolous positions.308 A Form 941-X supported by the Library and the statute is the opposite of a frivolous submission.
The United States' positions
The United States has represented that the Notice "lacks the force of law," that "the statute will control," that the ten percent figure "isn't an eligibility requirement" and is "a safe harbor rather than a hard floor," that eligibility is decided "on a case-by-case basis" under "the facts and circumstances," that "a business may be suspended 'due to' a government order addressing a third party," that "due to" means "because of," and that the substantiation guidance "is not mandatory"; the District Court accepted the first four and Tri-State held the sixth and seventh.309 Those statements are admissions of a party-opponent under Rule 801(d)(2); judicial estoppel is available against the United States on the positions the District Court accepted; and the Service is bound by its own directive to the Notice's favorable text "to the same extent as a revenue ruling."310 Employers in this industry hold the United States to every one of them; the full record of those representations, pinned, is at The IRS in Its Own Words.
Judicial estoppel and the two directions
Where the United States, having "succeed[ed] in maintaining" in Stenson Tamaddon that the ten percent figure is a safe harbor and that the Notice binds no one, asserts against an employer that the figure is a floor or that a Notice gloss decides the claim, the position is "clearly inconsistent" with the earlier one, the earlier court "accepted" it, and the United States "would derive an unfair advantage" from the change; judicial estoppel is available against it.311 Where the Notice's own words help the employer, the Service's directive binds it to them.312 Nothing in this analysis presents a gloss the United States has disclaimed as a reasonable alternative to the statute.
The records
The Library is organized by layer and jurisdiction: federal instruments by FED and a serial number (for example Ex. FED-020; Ex. FED-207); each State's and the District's instruments by the State's two-letter code and a serial number (for example Ex. TX-008; Ex. CA-002; Ex. WA-016; Ex. DC-057); the largest metropolitan areas' local instruments by MET, the metro code and a serial number (for example Ex. MET-LA-018; Ex. MET-NYC-017; Ex. MET-SAC-015); the sector files by SEC and the industry number (Ex. SEC-20-001 and the instruments of the agriculture and food file; Ex. SEC-10-041 and the instruments of the manufacturing file); the ecosystem files by ECO-A (borders, supply and foreign inputs; for example Ex. ECO-A-020) and ECO-B (schools, child care, leave, quarantine, transit and vaccination; for example Ex. ECO-B-054); the agency files by AGY and the agency code (for example Ex. AGY-ST-AGRICULTURE-PARKS-WILDLIFE-053; Ex. AGY-FED-LABOR-IMMIGRATION-014; Ex. AGY-USCG-PORTS-037; Ex. AGY-TRIBAL-054; Ex. AGY-TERRITORIES-035); the standing duties by DUT and the State code (for example Ex. DUT-TX-001; Ex. DUT-FED-001); the legal authorities by LAW (for example Ex. LAW-001; Ex. LAW-101) and the Service's and the United States' own documents by GOV (for example Ex. GOV-003; Ex. GOV-004); and the foreign instruments by FOR (for example Ex. FOR-001), cited as facts and circumstances only. Every exhibit carries its issuer, instrument, dates, grade, retrieval method, file and source in the Library; an instrument read in the issuing authority's own text is shown as "Primary source read," and an instrument resting on an identifiable governmental or documentary source is shown as "Confirmed from a secondary source." No instrument graded unverified is named on this page.
The finding stated
The Service's letters describe six quarters in which no governmental order limited the operations of a farm, a packing house, a processing plant or a farm labor contractor in the United States. Those quarters did not occur. The orders exist, they are in the Library, and the statute Congress wrote and re-enacted reaches them. It is factually incorrect to say otherwise, and this analysis so finds.