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The COVID Project

Industry 02 of 27 · Findings

Physician Practices and Outpatient Care

The conclusions for each of the six quarters and the standard of proof they meet.

CLclinical intake and waiting roomPRprocedures and elective visitsDXdiagnostics and laboratoryTMtelehealth under waiversFDfront desk and schedulingOFbilling and administrationSCPPE and suppliesHRhiring, credentialing, trainingWFworkforce availabilityCBpatients, referral sources…MKmarketing, outreach, events
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Findings

On the record assembled in the Library, and on the statute as written, re-enacted and construed in Tri-State, the operation of the trade or business of employers in the physician practice, outpatient clinic, behavioral health and allied health industry was partially suspended in each of the six calendar quarters from April 1, 2020 through September 30, 2021 due to orders from appropriate governmental authorities limiting commerce, travel and group meetings due to COVID-19. The findings are stated below in the statutory words, one paragraph for each quarter; the standards under which they are made are stated affirmatively; and the records on which they rest are identified. 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

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, namely the statewide prohibitions on elective and non-urgent medical, surgical and dental procedures in force in at least thirty-two States during the quarter, twenty-eight of them on April 1, 2020, and their conditioned resumption orders in force on June 30, 2020, the stay-at-home and gathering orders of forty-two jurisdictions, the federal supply-allocation, leave and travel instruments and the metropolitan health officers' orders (Ex. SEC-02-011; Ex. SEC-02-017; Ex. SEC-02-020; Ex. SEC-02-022; Ex. SEC-02-033; Ex. SEC-02-031; Ex. WA-015; Ex. SEC-02-048; Ex. SEC-02-058; Ex. OH-007; Ex. SEC-02-074; Ex. FED-070; Ex. FED-075; Ex. FED-170 and their counterparts in the State-by-State table).

The third quarter of 2020

During the calendar quarter beginning July 1, 2020 and ending September 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, namely the conditioned resumption orders in force in every State that had prohibited procedures, Texas' county and trauma-service-area prohibitions, the statewide and metropolitan face-covering, gathering, quarantine and travel orders, the federal leave, allocation and travel instruments and the CMS facility rules (Ex. SEC-02-014; Ex. SEC-02-015; Ex. NJ-084; Ex. SEC-02-023; Ex. SEC-02-032; Ex. WA-032; Ex. MA-061; Ex. FED-172; Ex. FED-077; Ex. FED-092 and their counterparts in the State-by-State table).

The fourth quarter of 2020

During the calendar quarter beginning October 1, 2020 and ending December 31, 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, namely the re-imposed procedure restrictions of Texas, Pennsylvania, Nebraska, New Mexico, Massachusetts, Indiana and California, the continuing conditioned resumption orders, the State workplace standards, the face-covering, gathering and stay-at-home orders and the federal leave, allocation, facility and travel instruments (Ex. SEC-02-015; Ex. SEC-02-016; Ex. SEC-02-037; Ex. PA-025; Ex. NE-021; Ex. NM-043; Ex. MA-066; Ex. IN-048; Ex. CA-021; Ex. WA-049; Ex. SEC-02-047; Ex. FED-170; Ex. FED-078 and their counterparts in the State-by-State table).

The first quarter of 2021

During the calendar quarter beginning January 1, 2021 and ending March 31, 2021, 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, namely the Texas, Pennsylvania, Massachusetts, Indiana, New Mexico and California procedure restrictions for the days they ran, the conditioned resumption orders of fourteen States, the State workplace standards, the face-covering and gathering orders, the federal workplace, conveyance, travel and allocation instruments of January 2021 and the CMS facility rules (Ex. SEC-02-016; Ex. PA-025; Ex. MA-066; Ex. CA-026; Ex. WA-049; Ex. SEC-02-023; Ex. NJ-084; Ex. SEC-02-032; Ex. FED-060; Ex. FED-020; Ex. FED-207; Ex. FED-082 and their counterparts in the State-by-State table).

The second quarter of 2021

During the calendar quarter beginning April 1, 2021 and ending June 30, 2021, 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, namely the conditioned resumption orders of sixteen States for the days they ran, the Pennsylvania elective-reduction order, the health care face-covering, facility and reporting orders that succeeded the general orders, the State workplace standards, the preemption instruments, the federal facility, travel, allocation and workplace instruments and, from June 21, 2021, the OSHA Healthcare Emergency Temporary Standard (Ex. WA-049; Ex. NJ-084; Ex. OR-043; Ex. PA-025; Ex. LA-047; Ex. SEC-02-073; Ex. OH-049; Ex. FED-094; Ex. FED-051; Ex. SEC-02-001 and their counterparts in the State-by-State table).

The third quarter of 2021

During the calendar quarter beginning July 1, 2021 and ending September 30, 2021, 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, namely the OSHA Healthcare Emergency Temporary Standard and its enforcement directives, the federal conveyance, entry and border orders, the CMS facility rules and the FDA revocations, the health care worker vaccination-or-testing orders of fifteen States, the District of Columbia, Puerto Rico and the largest metros and the public-employee orders of North Carolina, Virginia, Minnesota and Hawaii, the health care face-covering requirements of every State that preserved them and the indoor face-covering reinstatements of seven States and the District of Columbia and the largest metros (infection-prevention and airborne-transmission controls on every clinical setting and every indoor public space), Pennsylvania's elective-reduction order to August 23, Maine's health care order to August 30, Washington's Proclamation 20-24.2, Maryland's directive, New Jersey's Directives, West Virginia's conditions, the State workplace standards and the school, court, transit and facility orders on the industry's counterparties (Ex. SEC-02-001; Ex. FED-020; Ex. FED-094; Ex. SEC-02-045; Ex. SEC-02-038; Ex. SEC-02-019; Ex. SEC-02-051; Ex. SEC-02-030; Ex. OR-051; Ex. SEC-02-071; Ex. LA-038; Ex. NV-041; Ex. PA-025; Ex. ME-005; Ex. WA-049; Ex. NJ-084; Ex. WV-063 and their counterparts in the State-by-State table and the metro table).

The standards satisfied

The burden and its discharge

In a refund suit the employer bears the burden of proving its entitlement by a preponderance of the evidence, and the court redetermines the entire liability de novo without regard to the Service's administrative reasoning.278 The governmental orders on which these findings rest are public records whose existence, dates and terms are subject to judicial notice under Rule 201(b), and each is identified in the Library by issuer, instrument, date, authority and source.279 The findings are made on the statute's text, on the definitions the United States agreed to in Tri-State and the court adopted, and on the but-for causation standard the court held the clause imposes; no deference is owed to the Notice, as the United States has represented and the District Court held, and where the Notice's own words help the employer the Service is bound by them.280 The findings satisfy the safe harbor of the Notice many times over, and this analysis treats the safe harbor as what the United States has represented it to be.281 An employer that claimed the credit on the basis of these orders acted with reasonable cause and in good faith and with a reasonable basis, on public records, on the statute's text and on the Service's own published list of qualifying orders; sections 6664(c), 6676 (as amended by Pub. L. 119-21, § 70605(f)) and 6702 have no application to a position grounded in the orders themselves.282 Claims resting on these orders were correct when made and are correct now. The findings rest on public instruments alone; applying them to a particular employer requires only the identification of its State, its metro and the functions in which it operated, and the exhibits then follow from the Library. The record builder assembles them.

  1. Lewis v. Reynolds, 284 U.S. 281, 283 (1932) (Ex. LAW-020) ("a redetermination of the entire tax liability"); Welch v. Helvering, 290 U.S. 111, 115 (1933) (Ex. LAW-021); United States v. Janis, 428 U.S. 433, 440-41 (1976) (Ex. LAW-042); see the standards analysis on this site. ↩
  2. Fed. R. Evid. 201(b) (Ex. LAW-024); Daniels-Hall v. National Education Association, 629 F.3d 992, 998-99 (9th Cir. 2010) (Ex. LAW-073); see the standards analysis on this site. ↩
  3. Tri-State, ECF No. 38, at 7-11, 17-19; Loper Bright Enterprises v. Raimondo, 603 U.S. 369 (2024) (Ex. LAW-008); Doc. 49 at 27 ("the Notice carries no force of law and is entitled to no deference"); Doc. 44 at 19, 24, 31 & n.8; IRM (CCDM) 32.2.2.10(3)-(4) (Ex. LAW-034; Ex. GOV-006); see the statute analysis and the collection of the United States' positions on this site. ↩
  4. Doc. 44 at 14; Doc. 49 at 15, 26; Br. for Appellees at 37-38; Tri-State, ECF No. 38, at 15-16. ↩
  5. 26 U.S.C. § 6664(c) (Ex. LAW-039); 26 U.S.C. § 6676(a), as amended by Pub. L. 119-21, § 70605(f) (Ex. LAW-040; Ex. LAW-005); 26 U.S.C. § 6702 (Ex. LAW-041); Treas. Reg. § 1.6662-4(d) (Ex. LAW-036); Treas. Reg. § 1.6662-3(b)(3) (Ex. LAW-035); Notice 2021-20, Q&A-10, 2021-11 I.R.B. at 927-28 (Ex. GOV-005); see the standards analysis on this site. ↩