Findings
On the statute as written, on the definitions the United States agreed to and Tri-State fixed, and on the instruments catalogued in the Library, the operation of every employer in social assistance and community services in the United States was partially suspended in each of the six claimable quarters due to orders from appropriate governmental authorities limiting commerce, travel and group meetings due to COVID-19. The findings follow, quarter by quarter, in the statutory words. Measured against them, the Service's form sentence that no order was in effect describes, for every one of these six quarters and for every function of this industry, 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 every employer in this industry was partially suspended due to orders from appropriate governmental authorities limiting commerce, travel and group meetings due to COVID-19: the orders that closed adult day, senior-center, day-habilitation, vocational-habilitation and sheltered-work programs by name in Iowa, Maryland, Pennsylvania, Ohio, Alabama, Louisiana, New Jersey, Kentucky, Miami-Dade, Minneapolis, Nassau County, Fairfax County and the other jurisdictions named in the six-quarters section and by category under the stay-at-home and closure orders of every other State; the federal and State orders that barred visitors and group activities from every group home and intermediate care facility; CARES Act § 3222, which converted every congregate-meal program to home delivery; HUD's waiver memorandum, which rewrote the operating rules of every federally funded shelter; the Appendix K amendments and section 1135 waivers that rewrote the payment terms of every waiver-funded service; the non-congregate sheltering orders; and the leave mandates, school closures and stay-at-home orders that governed the workforce. Wages paid from March 13, 2020 belong to this quarter's proof.281
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 the adult day and senior-center closures that continued in Ohio, Maryland, New Jersey, Tennessee, Vermont, Miami-Dade, Minneapolis and Nassau County; the conditional and capacity-capped reopenings of Iowa, Delaware, Ohio, California and Minneapolis; the residential visitation and testing orders of the federal government and of Florida, Louisiana, New Jersey, Ohio, Pennsylvania and Washington; HUD Notice CPD-20-08; the federal eviction moratorium; the leave mandate; and the reopening frameworks and face-covering and exposure-control orders of every State.282
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 continuing closures in Maryland and New Jersey; the capacity-limited reopenings in Tennessee, Delaware, California and Ohio; the winter re-tightening orders that cancelled senior-center activities in every Red county of Indiana, restricted entry into every congregate care facility in Michigan, regulated soup kitchens under Michigan's gathering orders, required testing at Kansas adult day care facilities and New Jersey developmental-disability settings and re-imposed gathering, capacity and telework rules across the country; the federal residential conditions; the payer and grant instruments; and the leave mandate to December 31, 2020.283
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 Maryland closure to March 12 and the New Jersey closure throughout; the Ohio Director's orders, amended March 17, 2021; the winter re-tightening orders in force into the quarter; QSO-20-23 and, from February 10, QSO-21-14; the conveyance order and the TSA directive from February 1; Appendix K and HUD Notice CPD-20-08; and the Maryland Department of Health directives under which adult day care centers reopened.284
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 Ohio Director's orders to June 2; the New Jersey closure to June 15 and Executive Directives 21-006 and 21-007 thereafter; the testing and face-covering orders on adult day, group-home, intermediate-care and shelter settings in Kansas, Colorado, Massachusetts, Michigan and Washington; QSO-21-14 and the vaccine-offering condition; the OSHA Healthcare Emergency Temporary Standard from June 21; Appendix K, ARPA § 9817, CARES Act § 3222 and HUD Notice CPD-20-08; the conveyance order and the TSA directives; and Arizona's Executive Order 2021-09.285
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 the OSHA Healthcare Emergency Temporary Standard on every adult day health center, intermediate care facility and group home with nursing services; QSO-21-14 and the vaccine-offering condition on every intermediate care facility; Appendix K and ARPA § 9817 in every State; HUD Notice CPD-21-08 from July 19 and CARES Act § 3222 throughout; the conveyance order and the TSA directives on every day; New Jersey Executive Directives 21-006 and 21-007 and Executive Order 252; the face-covering and exposure-control orders on congregate programs and shelters in Colorado, Massachusetts, North Carolina, New Jersey, Connecticut, New York, Washington and California; the testing orders in Kansas and Colorado; Michigan's residential care order and Washington's Proclamation 20-66; Maryland's Order 21-03-09-02 to August 15; and the vaccination and testing mandates naming adult day, group-home, congregate-setting and shelter workers in California, New Mexico, New Jersey, Illinois, Rhode Island, Delaware, Maryland, New York, Connecticut, Washington, Oregon, the District of Columbia, New York City, Denver, Los Angeles County, Marin County and Philadelphia, each issued inside the quarter. Congress re-enacted the Suspension Clause for this quarter on March 11, 2021 and left it in place on November 15, 2021.286
The standards satisfied
Preponderance
The employer's burden in a refund suit is a preponderance of the evidence, and the evidence here is the public record: orders, proclamations, rules, approved waiver amendments and grant notices published by the issuing authorities, each a public record subject to judicial notice under Federal Rule of Evidence 201(b), of which a court "must take judicial notice if a party requests it and the court is supplied with the necessary information."287 The Library supplies the necessary information for every instrument this page cites.
Fraud
Fraud is the Government's burden, by clear and convincing evidence, under I.R.C. § 7454(a); a Form 941-X supported by the instruments catalogued here is the opposite of a fraudulent claim.288
Substantial authority and reasonable basis
The positions stated on this page rest on the statutory text of two enactments; on Tri-State's holdings on the meaning of "partially suspended" and "due to"; on the Supreme Court's holdings in Burrage, Gross, Nassar, Bostock and Abercrombie on but-for causation and the addition of words to a statute; on the United States' own representations to two federal courts, admissible against it; on the Notice's favorable Q&As, which bind the Service; and on the instruments themselves. That is substantial authority within Treas. Reg. § 1.6662-4(d) many times over, and a reasonable basis within § 1.6662-3(b)(3).289
Reasonable cause and good faith; the erroneous-claim penalty; frivolous positions
The positions rest on the statute's text and the public record of governmental orders; the Service's FAQs of April 29 and June 19, 2020 contained no percentage and no comparable-operations factors, the Notice that later carried them is by the United States' own account to two federal courts a safe harbor without the force of law and not an eligibility requirement, and the positions satisfy I.R.C. § 6664(c)(1); they are not claims "made for an excessive amount" without reasonable cause under I.R.C. § 6676(a) as amended by Public Law 119-21, § 70605(f); and they are not positions the Secretary has identified as frivolous under I.R.C. § 6702 and Notice 2010-33, which lists none concerning the employee retention credit or the meaning of a governmental order.290
The United States' positions
The United States' statements in Doc. 44, the Brief for Appellees and open court are admissions of a party-opponent under Federal Rule of Evidence 801(d)(2); judicial estoppel is available against the contrary positions on which the Service's letters rest; and the Service is bound by its own directive to the Notice's favorable text "to the same extent as a revenue ruling." The COVID Project holds the United States to those positions.291