The Service's positions, answered
The Service's letters and memoranda take fourteen positions against employers of this class. Each is stated below in the Service's general vocabulary and answered from the text of the Suspension Clause, from Tri-State, from the instruments and from the United States' own representations. None survives the public record.
No orders in effect during the quarter
There were no government orders related to COVID-19 in effect during the quarter which could have fully or partially suspended your trade or business.
The employer was designated essential and remained open
The employer was designated essential and remained open.
The word "essential" is not in the statute. The Notice itself provides that an employer permitted to remain open "may be considered to have a partial suspension of operations if, under the facts and circumstances, more than a nominal portion of its business operations are suspended by a governmental order," and its Example 1 to Q&A-17 is a restaurant permitted to remain open for takeout whose "indoor and outdoor dining service" was more than a nominal portion of its operations.163 Every closure order in the State-by-State treatment above permitted restaurants to remain open for takeout and delivery; every one of them closed the dining room and the bar. An order that permits a business to sell food across a counter while prohibiting it from seating a single guest has suspended the operation the business exists to perform. The designation described the door; it did not open the dining room.
Stay-at-home orders directed to the public are not considered
Stay-at-home orders directed to the public are not considered; only orders directed at business operations count.
The statute says nothing of the source of the order beyond the adjective "appropriate" and nothing of its addressee; it describes the orders by their object, "limiting commerce, travel, or group meetings." The Notice's own second example of a governmental order is "[a] State's emergency proclamation that residents must shelter in place for a specified period," and its third is "[a]n order from a local official imposing a curfew on residents that impacts the operating hours of a trade or business."164 The United States has represented that "a business may be suspended 'due to' a government order addressing a third party"; the contrary gloss it offered the District Court is a sentence in a brief about a document that, on the United States' own account, "lacks the force of law," and it contradicts the Notice's own second listed example.165 New Jersey's EO 107 ¶ 2 confined every resident to home except, among a short list, for "obtaining takeout food or beverages"; that order limited commerce at every restaurant in the State by naming the one form of it the residents could still buy.166 The position is a gloss the United States has disclaimed and the Notice contradicts.
The employer could have continued comparable operations through telework
The employer could have continued comparable operations through telework.
The Notice's telework rule applies where an employer "is able to continue operations comparable to its operations prior to the closure ... by requiring its employees to telework," and its own factors provide that where "the employer's physical work space is so critical to its trade or business operations that tasks central to the trade or business's operations are unable to be performed remotely, then this factor alone indicates that the employer is not able to continue comparable operations."167 A dining room, a bar, a kitchen and a banquet hall cannot be operated from a server's home. The Notice's Example 2 to Q&A-15 makes the point for a physical-therapy practice whose "workplace, including access to physical therapy equipment, is central to its operations"; a restaurant's stove and tables are no less so.168 The position describes an industry that does not exist.
The orders affected the employer's customers, not the employer
The orders affected the employer's customers, not the employer (Q&A-13).
Q&A-13 addresses an employer whose operations "are not suspended due to a governmental order but the employer experiences a reduction in demand," its example being an auto-repair shop that "suspends its operations due to the lack of demand."169 The orders relied on here did not reduce demand; they fixed by law who could enter the premises, in what number, at what distance, until what hour and on what proof, and they closed the premises outright for weeks at a time. An order that caps a dining room at 25 percent is an order on the dining room, whoever it names. The United States' own admission that a third-party order can suspend a business disposes of the point, and the Notice's Q&A-13 was written for a different case.170
The employer's measures were voluntary
The employer's measures were voluntary (Q&A-14).
Q&A-14 addresses an employer that "voluntarily suspends operation of a trade or business or voluntarily reduces hours due to COVID-19," where "the suspension or reduction in hours is not due to a governmental order."171 Nothing relied on here was voluntary. The closure of the dining room on March 16, 2020 in New York was an order of the Governor punishable under Executive Law § 29-a; the closure of the bar on June 26, 2020 in Texas was an order of the Governor enforced by the Alcoholic Beverage Commission's thirty-day suspensions; the 9:30 p.m. closing in Massachusetts from November 6, 2020 was an order of the Governor and the Commission; the face covering on every patron in Boston from August 27, 2021, one of the exposure-control conditions the Public Health Commission placed on every indoor establishment, was an order of that Commission.172 A restaurateur who complied with the law did not act voluntarily, and the Notice does not say otherwise.
The Notice's own words go further. Q&A-14 reaches, by its terms, only a suspension "not due to a governmental order," and the United States and the District Court have defined the excluded employer as one "not being ordered to do so" (the summary-judgment order of June 20, 2025, Stenson Tamaddon, LLC v. IRS, No. 2:24-cv-01123-SPL (D. Ariz.), ECF No. 49 ("Doc. 49"), at 18; Br. for Appellees at 42). No restaurant, bar or caterer in the eight States whose standing duties are set out above answered that description in any of the six quarters. The reopening orders permitted a dining room to operate only on conditions with the force of law (Ex. TX-021; Ex. OH-020; Ex. AZ-019; Ex. DUT-TX-012). The standing statutes commanded the same conduct independently: Texas's "Each person shall act responsibly to prevent and control communicable disease" (Health and Safety Code § 81.002, Ex. DUT-TX-001; Ex. DUT-TX-002; Ex. DUT-TX-005; Ex. DUT-TX-006) and Labor Code section 411.103 (Ex. DUT-TX-013); North Carolina's "All persons shall comply with control measures" (Ex. DUT-NC-001); Ohio's R.C. 3701.352 and 3701.81(C) (Ex. DUT-OH-004; Ex. DUT-OH-007); and the general duty clause, enforced by citation from September 2020 (Ex. DUT-FED-001; Ex. LAW-487). The legislatures of Texas and Florida then fixed the standard of care as compliance with governmental standards, guidance and protocols, from the first days of the emergency (Ex. DUT-TX-015; Ex. DUT-FL-012), and Arizona presumed good faith for the business that "adopted and implemented reasonable policies related to the public health pandemic," the policies Executive Order 2020-36 ¶ 5 had required of every employer since May 2020 (Ex. DUT-AZ-010; Ex. AZ-019). The safe-workplace statutes had no COVID-19 content until the health authorities said what a safe dining room and kitchen required; the six-foot table spacing, the screened shift, the sanitized station and the masked server were taken because those directives defined the duty and would not have been taken without them. "Due to" is but-for causation (Tri-State, ECF No. 38, at 17-19), and the causation here runs from the command to the measure without an intervening choice; an owner who describes compliance under threat of a misdemeanor, a license suspension or an OSHA citation as a choice describes the choice the Supreme Court refused to call voluntary (Union Pacific R.R. v. Public Service Comm'n, 248 U.S. 67, 70 (1918), Ex. LAW-470). The Notice confirms the result: a modification "required by a governmental order as a condition of reopening" is a partial suspension due to the order (Q&A-18, at 930). A statute that commands conduct is an order from an appropriate governmental authority, and the Service's premise fails wherever a command reached the employer, which in this industry was everywhere and on every day of the six quarters.173
The portion affected was not more than nominal
The portion of the business affected was not more than nominal (the 10 percent figure applied as a floor).
The United States has represented that the ten percent figure "isn't an eligibility requirement," is "[e]ffectively ... a safe harbor," and "does not impose a threshold or place a limitation on receiving the credit"; the District Court held it "not an exclusionary cut-off point"; Tri-State held it "a method for the test to be met not as a requirement to meet the test."174 The figure is therefore the United States' safe harbor, and this industry sits far above it on the Notice's own terms: the Notice states that "[o]n-site dining is more than a nominal portion" of a restaurant's operations and that "occupancy restrictions at a restaurant with indoor dining service may result in an actual, and more than nominal, reduction of the restaurant's ability to service customers."175 The Bureau of Labor Statistics measured the portion in April 2020 at 47 percent of leisure and hospitality employment and 29.5 percent of food-service sales in a month.176 A position that applies as a floor what the United States has told two courts is a safe harbor, a sufficient condition and not a necessary one, cannot be squared with the United States' own words.
The required modifications had only a nominal effect
The required modifications (masks, gloves, spacing, screening) had only a nominal effect on operations (Q&A-18).
Q&A-18 names "limiting occupancy to provide for social distancing," "changing the format of service (for example, restrictions on buffet or self-serve, but not prepackaged or carry-out)" and "requiring employees and customers to wear face coverings" as the modifications contemplated by Q&A-17, and it states that occupancy restrictions at a restaurant "may result in an actual, and more than nominal, reduction of the restaurant's ability to service customers."177 The sentence the Service relies on speaks of "mask requirements" as "modifications altering customer behavior" and of rules "that require employees to wear masks and gloves while performing their duties," and of nothing else; it does not describe an order that guests remain seated with their party, that there be no mingling, that no one enter without proof of vaccination, or that the operator verify every entrant and post the rule at the door, and it does not describe a face-covering rule that arrived, as every one relied on for the third quarter of 2021 did, as one condition among several on the same room, a workplace infection-prevention and exposure-control requirement of which the face covering was one control. Those are conditions on the room, and the Notice's own restaurant example holds that a six-foot spacing constraint "has more than a nominal effect on Employer F's business operations."178 Tri-State held that the compelled protocols of the order were the suspension, and that "[s]ick patients and employees alone did not require additional protocols."179 The position reads one sentence of Q&A-18 against the four that surround it and against the Notice's own restaurant example; it is not a construction of the Notice, it is an omission from it.
A declaration of emergency is not an order
A declaration of emergency is not an order (Q&A-10).
Agreed, and this analysis is built on the distinction the Notice itself draws: a declaration falls outside Q&A-10 only "if it does not limit commerce, travel, or group meetings in any manner." A bare declaration is cited here only as the predicate that authorized the orders (Proclamation 9994; the public health emergency; the State emergencies), and the orders are cited as the orders. A proclamation that itself closed the dining room is an order in the statute's words because of what it did, whatever its title: Iowa's Proclamation of Disaster Emergency of March 17, 2020 (Ex. IA-002), Delaware's First Modification of the Declaration of a State of Emergency of March 16, 2020 (Ex. DE-002), Hawaii's Third Supplementary Proclamation of March 23, 2020 (Ex. HI-004) and Puerto Rico's OE-2020-023 of March 15, 2020 (Ex. AGY-TERRITORIES-002) are cited for their closure clauses, not their titles. Proclamation 9994 is not the instrument that closed a dining room; Executive Order 202.3 is (Ex. FED-001; Ex. NY-010).180
The supplier was not itself closed by order
The supplier was not itself closed by order; supply-chain effects are too attenuated (AM 2023-005).
The United States told the Ninth Circuit that the Notice's supplier rule "never even mentions a 'physical[ ] clos[ure]' order against the supplier," and the Notice's Q&A-12 asks only whether "the business's suppliers are unable to make deliveries of critical goods or materials due to a governmental order that causes the supplier to suspend its operations."181 The Chief Counsel memorandum's "narrow, limited exception" and "absolutely could not operate" tests appear in no statute, in no Notice and in no brief of the United States, and a Chief Counsel memorandum "may not be used or cited as precedent."182 This analysis relies on the supplier orders (Executive Order 13917; the border and entry orders; the wholesalers' rules) as orders limiting commerce that reached the kitchen, food-supply and vendor function (KT, above), on the text of the clause, on Q&A-12's own logic and on the United States' statement of the supplier rule without the Chief Counsel gloss; the dining room, the bar and the banquet hall were suspended by orders addressed to them, and the kitchen by orders addressed to those who fill it. The gloss adds words to the Notice that the United States itself left out when it described the rule to the Ninth Circuit.
The orders had lifted before the quarter began
The orders had lifted before the quarter began; any effect was a lingering effect.
For every quarter through the second quarter of 2021 the orders had not lifted; the State-by-State treatment above fixes the end dates: outside Hawaii the last fell on June 30, 2021 in Oregon and Washington, and Hawaii's ran to December 1, 2021. For the third quarter of 2021, the orders set out in subpart B of that quarter were in force in that quarter, and this analysis names, in the closing paragraph of that section, every instrument on which it does not rely. Beyond those, the restoration compelled by the lifted orders' own phase steps is a continuing suspension within the clause's grammar and Tri-State's definition of a suspension as a "delay," not an effect of an order that had ceased to exist; the interconnected-economy section states the arithmetic.183 The position mistakes the day an order expired for the day the suspension it caused ended; the statute asks when the operation was suspended, and Congress did not write "orders in effect during the calendar quarter."
No decline in gross receipts
The employer did not experience the required decline in gross receipts.
The gross-receipts prong is an alternative route to eligibility that this analysis does not rely on. Tri-State held the two prongs independent "by Defendant's admission" and found "even Defendant's own argument is contradictory" in suggesting that the gross-receipts prong narrows the suspension prong.184 An employer that satisfies the Suspension Clause is an eligible employer whatever its receipts.
Guidance, recommendations or best practices, not orders
The instruments relied on are guidance, recommendations or best practices, not orders.
Every instrument on which a finding in this analysis rests is an executive order, proclamation, public health order, emergency rule, statute, ordinance, board rule or federal order carrying a sanction: misdemeanor liability under the State emergency acts, license suspension under the alcohol codes, civil penalties under the State occupational-safety acts and the federal directives, closure under the municipal codes.185 The guidance documents of the period (the CDC's considerations, the FDA's best practices, OSHA's alerts, the trade associations' reports) are cited as context, described as guidance and ground no finding. So are the alcohol regulators' notices, advisories and announcements, which this analysis cites beside the executive orders, public health orders, emergency rules and statutes they implemented; the order is relied on, and the regulator's announcement is the record of how it reached the license. The Service's "recommendations" language belongs to Q&A-10, which excludes "[s]tatements from a governmental official, including comments made during press conferences"; a Governor's executive order is not a press conference.186
"Order" must be given its ordinary meaning
"Order" must be given its ordinary meaning.
Agreed, and applied. An order is a command of a governmental authority carrying legal consequences for noncompliance. "Any restaurant or bar in the state of New York shall cease serving patrons food or beverage on-premises" is an order (Ex. NY-010). "People shall not visit bars or similar establishments that hold a permit from the Texas Alcoholic Beverage Commission" is an order (Ex. TX-021). "Restaurants and Bars are closed for indoor dine-in service" is an order (Ex. WA-047). "Patrons must remain seated with their party ... No mingling" is an order (Ex. HI-025). "[A] covered entity shall not permit a patron, full- or part-time employee, intern, volunteer, or contractor to enter a covered premises without displaying proof of vaccination" is an order (Ex. MET-NYC-017). "Persons must wear masks over the mouth and nose when traveling on conveyances into and within the United States" is an order (Ex. FED-020). Each satisfies the ordinary meaning the Service proposes and the Notice's "determined without regard to the level of enforcement" rule besides.187
The Service is free to disagree about the weight of these instruments. It is not free to say they did not exist.