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 trucking, logistics, warehousing, wholesale and distribution 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 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 stay-at-home orders of every State but eight and the District of Columbia and the closure orders of every State, which closed the industry's customers and named its permitted operations, Pennsylvania's closure of five wholesale lines and New York's closure and conditioned reopening of wholesale trade, the workplace orders of New Jersey, New York, Ohio, Minnesota, Pennsylvania, Massachusetts, Kentucky, Illinois and Washington and of the largest metros, the traveler-quarantine and checkpoint orders of Texas, Florida, Alaska, Vermont, Maine, Hawaii, Rhode Island and Oklahoma, the closure of the motor-vehicle offices and the suspension of skills testing under the States' emergency orders, the Captains of the Port's orders and maritime regulations the Coast Guard's bulletins implemented, the Defense Production Act orders and the land-border limitation, each an order from an appropriate governmental authority limiting commerce, travel or group meetings due to COVID-19.
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, protocol and re-closure orders on the industry's customers, the workplace orders and State face-covering orders (airborne-transmission controls on the workplace) on its floors and employees, Virginia's occupational standard, the interstate quarantine orders of New York, Connecticut, Massachusetts and Chicago and the quarantines of Hawaii and Alaska on its routes, the motor-vehicle office closures and collection-site limitations on its hiring, and the border and Defense Production Act orders and the Captains of the Port's maritime conditions on its inputs.
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-tightening orders that re-closed or re-capped its customers in at least ten States and the largest metros, the occupational-safety rules of Michigan, Oregon, California, Virginia and New Mexico and New Jersey's Executive Order 192 on its own floors, Pennsylvania's test-or-quarantine order and the New York, Connecticut, Massachusetts and Chicago orders on its drivers, the transit orders on its workforce, and the border, Title 42 and Defense Production Act orders and the Captains of the Port's maritime conditions on its inputs.
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 on its customers through their expiry, the federal conveyance order (an airborne-transmission control) at every port, port of entry, rail yard and multi-occupant cab from February 1, as implemented at every sea port and on every vessel through the Coast Guard's bulletins, the Federal Railroad Administration's order, the entry, testing, border and Title 42 orders, the workplace standards of six States, the metro orders on its floors and drivers, and the traveler-quarantine orders in force to their expiry between March 1 and April 1, 2021.
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 State and metro capacity and protocol orders in force to their expiry between April 4 and June 30, 2021, the federal conveyance, rail, border, entry and Title 42 orders in force throughout (the conveyance order implemented at every sea port through the Coast Guard's bulletins), the workplace standards of California, Virginia, Michigan, Oregon, Washington and New Mexico, New Jersey's Executive Order 192 throughout, as carried for unvaccinated or unverified employees by Executive Orders 242 and 243 from June 4, OSHA's Healthcare ETS at every health-care dock from June 21, and the metro quarantine, isolation and emergency orders.
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 order and its directives, as implemented at every sea port and on every vessel through the Coast Guard's bulletins, the Federal Railroad Administration's order, the land-border notices of June 23, July 22, August 23 and September 22, the entry, Title 42 and testing orders, OSHA's revised National Emphasis Program naming general warehousing and its Healthcare ETS, the Safer Federal Workforce Task Force's rules and Executive Order 14042, the occupational standards of California, Virginia, Washington, Oregon and New Mexico, Washington's Proclamation 20-25.14 and the Washington Ready plan, New Jersey's Executive Order 192 requirements as carried by Executive Orders 242 and 243, New York's HERO Act plans and their activation and its Department of Health's rules, the indoor face-covering orders (workplace infection-prevention and exposure-control requirements) of Louisiana, Nevada, Oregon, Washington, Illinois, New Mexico, Hawaii and the District of Columbia and of the freight hubs listed in the third-quarter inventory, from July 17, 2021 onward, the health-care-worker vaccination orders of nine States and the District and the State-workforce orders of five States, the vaccination-proof orders of four cities, the school orders of sixteen States and the District and the school-rule orders of Tennessee, Montana and North Carolina, the quarantine and isolation orders, the court and transit orders and the emergencies of twenty-five States, in force on every day of the quarter or issued within it.
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.202
The standards
Each finding is established by a preponderance of the evidence, on public records subject to judicial notice, in a de novo proceeding.203 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, LLC v. IRS, the United States' representations to two federal courts, and the instruments themselves.204 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, as amended by Pub. L. 119-21 § 70605(f) to reach employment-tax claims, does not reach a claim made with reasonable cause; 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 2010-33.205 Fraud is the Government's burden by clear and convincing evidence, and nothing in a claim founded on the public record supports it.206
Every instrument named on this page is in the Library under the exhibit identifier cited, saved from the issuing authority or an identifiable secondary source and graded accordingly; each record carries the issuer, the instrument, the dates, the quarters in force, the limitation types, the operative words and the source, and each exhibit is cited for what it says.