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 the rental and leasing industry 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, with the orders of March 13 through March 31, 2020 counted toward it, the operation of the trade or business of employers in the rental and leasing industry was partially suspended due to the stay-at-home and closure orders of forty-two States and the District of Columbia that confined the traveler and closed the showroom, the construction shutdowns and restart conditions of Pennsylvania, New York, New Jersey, Michigan, Washington, Vermont, Boston, the Bay Area and Alaska that idled the rented machine, the gathering bans of forty-six States and the District that prohibited the event, the traveler quarantines of eighteen States and Utah's travel-declaration order, the entry proclamations, land-border notices and visa suspension, the paid-leave mandate, the closure of the motor-vehicle offices of nearly every State and the Department of Transportation's minimum-service order, 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 job-site standards under which construction restarted, the gathering caps of every State, the traveler quarantines of thirteen jurisdictions and Kauai's rental-vehicle prohibition, the capacity and face-covering conditions of every reopened showroom and counter, the entry proclamations and land-border notices, the paid-leave mandate and the minimum-service order.
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 prohibited or re-capped every indoor gathering in some twenty States, cut or closed the showroom, re-imposed telework in eight States and added traveler quarantines in seven jurisdictions, the workplace standards of Michigan, California, Oregon and Virginia, the entry, border and Title 42 orders, and the paid-leave mandate to its last day.
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 continuing winter orders through their stepped expiry, the federal conveyance and transportation-hub order, an airborne-transmission control on every airport and shuttle, and airport security directives from February 1, 2021, the entry proclamations, inbound-testing order and land-border notices, the workplace standards, the traveler quarantines of the Northeast, Hawaii and Kansas, and the minimum-service order.
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 and gathering caps in force to their expiry between April 16 and June 30, 2021 in twenty-four States, the federal conveyance order and directives on every day, the entry proclamations with India added, the land-border notices, the minimum-service order, the workplace standards, the Healthcare Emergency Temporary Standard, the traveler quarantines of Hawaii, Kansas, Rhode Island, Vermont, Maine and New Hampshire to their dates, the motor-vehicle credential extensions and the Texas title and registration waiver.
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 security directives, entry proclamations, land-border notices, Title 42 and inbound-testing orders, minimum-service order and workplace and site-access rules in force on every day of the quarter, Hawaii's proclamations, quarantine and gathering caps, Kansas's quarantine, the workplace standards of seven States and New York's activated exposure-prevention plans, the universal indoor face-covering orders, with the exposure-control duties they carried, of seven States and the District and of the local jurisdictions listed in the third-quarter section, subpart B-10, in twenty-three of the forty metropolitan areas from July 17, 2021 onward, and the courthouse, government-building, school and personnel orders of the metros listed there, the vaccination-proof conditions of entry in New York City, San Francisco, New Orleans and Honolulu, the school and quarantine orders of at least eighteen States and the District, the motor-vehicle credential extensions and road-test and inspection suspensions, and the sector orders issued under the continuing emergencies of thirty-five jurisdictions.
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.277 The Notice's own words confirm it: a workplace closed "for certain purposes, but not others" is partially suspended; a modification required by order with more than a nominal effect is a partial suspension; an order on a supplier suspends the customer; a multi-State employer suspended in some jurisdictions is eligible in all; and an employer suspended for part of a quarter is eligible for the whole of it.278
The record establishes each finding by a preponderance of the evidence, on public records subject to judicial notice, in a de novo proceeding in which the court redetermines the entire liability and the Service's administrative reasoning is of no consequence.279 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, the Notice's own favorable provisions and the instruments themselves.280 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 for claims made after July 4, 2025, 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 2010-33.281 Fraud is the Government's burden by clear and convincing evidence, and nothing in a claim founded on the public record supports it.282
Every exhibit cited on this page is graded in the Library as a primary source read or as confirmed from a secondary source; an instrument the Library has not verified is not named here. Where the record of a governmental action is the acting agency's own announcement, the announcement is cited as the record of that action and the order under which the agency acted is cited as the instrument.