Findings
On the statute's words, on Tri-State's definitions, on the United States' own representations and on the orders in the Library, employers in fitness, recreation, arts, entertainment and sports in the United States had the operation of their trade or business partially suspended during each of the six calendar quarters from the second quarter of 2020 through the third quarter of 2021 due to orders from appropriate governmental authorities limiting commerce, travel and group meetings due to COVID-19. The Service's contrary account of the period is not a contest of weight; it is a description of a period that did not occur.
The findings by quarter
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 the orders of every State and the District closing gyms, fitness studios, movie theaters, live-performance venues, bowling alleys, arcades and amusement facilities by name, the county and city closure orders of the four States without statewide closures, the stay-at-home orders of forty-two States and territories, the gaming regulators' closure orders, the suspension of every organized season, the reopening orders' capacity, class, amenity and distancing conditions, the federal visa, entry, border and sailing suspensions and the FFCRA leave mandate, each an order from an appropriate governmental authority limiting commerce, travel or group meetings due to COVID-19.270
The third quarter of 2020
During the calendar quarter beginning July 1, 2020 and ending September 30, 2020, that operation was partially suspended due to the capacity, class, amenity and distancing orders of every reopened jurisdiction, the re-closure orders of Arizona and California and their counties, the continued closure orders of New Jersey, New York and Michigan, the county re-closures of Pennsylvania, Alaska, Indiana and Hawaii, the spectator prohibitions and caps, the fair and festival prohibitions, the interstate traveler quarantines, the entry proclamations and the FFCRA mandate.271
The fourth quarter of 2020
During the calendar quarter beginning October 1, 2020 and ending December 31, 2020, that operation was partially suspended due to the winter re-closure and re-cap orders of twenty-two States and the District and the sport, gathering, spectator and airborne-transmission orders of nine more States and Anchorage, the metro orders that closed or capped the industry further, the sports suspensions, the sector regulators' orders and the federal sailing, entry, border, eviction and leave instruments.272
The first quarter of 2021
During the calendar quarter beginning January 1, 2021 and ending March 31, 2021, that operation was partially suspended due to the winter orders in force on January 1 and their stepped successors, in force in thirty-seven jurisdictions on the last day of the quarter, the terminating instruments that fixed the dates on which twelve jurisdictions withdrew, the federal conveyance, workplace, testing and entry orders and the sector regulators' notices.273
The second quarter of 2021
During the calendar quarter beginning April 1, 2021 and ending June 30, 2021, that operation was partially suspended due to the capacity, class, spectator and gathering orders in force to their stepped expiry between April 6 and July 6, 2021, the caps still in force in Washington, Oregon, New Mexico, Rhode Island, Delaware and Hawaii on the last day of the quarter, California's mega-event rule and Washington's large-event rule, the unvaccinated-patron face-covering rules of seven States, one of the exposure-control conditions the reopening orders kept in force, the sector regulators' notices, the federal conveyance, entry, border, sailing and workplace orders and the school, quarantine and traveler orders in force through the quarter.274
The third quarter of 2021
During the calendar quarter beginning July 1, 2021 and ending September 30, 2021, that operation was partially suspended due to the federal conveyance mask order and security directives, the entry proclamations and land-border notices, the Title 42, testing and sailing orders, the federal workplace, contractor and OSHA instruments, Hawaii's statewide caps of August 10, 2021, Nevada's Directives 047, 049 and 050, the statewide face-covering and exposure-control orders of Louisiana, Oregon, Illinois, New Mexico and the District, Washington's face-covering, event and vaccination instruments, California's mega-event rule and workplace standard, the State emergency, health-care, school, court and workforce instruments of every other jurisdiction, the vaccination-proof entry orders of New York City, San Francisco, New Orleans and Honolulu, Honolulu's gathering and event orders, the Los Angeles County and Pasadena face-covering and mega-event orders, King County's face-covering and vaccination-verification orders, the Bay Area's orders, the local face-covering and exposure-control orders inside every facility in more than twenty jurisdictions, the vaccination-or-test orders on the industry's part-time workforce, the school masking and quarantine orders of the 2021-22 year, the quarantine and isolation orders, the sector regulators' instruments and the continuing suspension the orders of the five preceding quarters caused.275
In each quarter
In each quarter the orders caused a temporary delay, interruption or termination of a more than nominal portion of the industry's operations; in each quarter the suspension existed "during the calendar quarter"; and in each quarter, but for the orders, no law required the change.276
The standards satisfied
Each finding is established by a preponderance of the evidence, on public records subject to judicial notice, in a de novo proceeding.277 Each position taken in this analysis has substantial authority: the statutory text, four enactments of Congress, the Supreme Court's canons of construction and causation, Tri-State's holdings on the United States' agreed definitions, the District Court's holdings in Stenson Tamaddon, the United States' representations to two federal courts, and the instruments themselves.278 A taxpayer who assembled the orders that governed its industry and applied the statute's words to them acted with reasonable cause and in good faith under section 6664(c); the erroneous-claim penalty of section 6676(a), as amended by Pub. L. 119-21, § 70605(f), does not reach a claim whose excessive amount "is due to reasonable cause," and such a claim is one; and a position that applies the words Congress wrote to the Federal Register and the State registers is not frivolous under section 6702 or Notice 2010-33.279 Fraud is the Government's burden by clear and convincing evidence, and nothing in a claim founded on the public record supports it.280 Every instrument named on this page is in the Library with its issuer, dates, in-force quarters, limitation types, grade and source; only instruments verified from the issuing authority or an identifiable secondary source are named, and the methodology page states how the Library was assembled and graded.