In plain terms: when the IRS turns down an Employee Retention Credit claim on the "governmental orders" ground, its letter gives one of fourteen recurring reasons. They recur because they come from templates, not from a study of your business or your State. This section takes each of the fourteen sentences in turn, quotes it exactly, and measures it against three things that are public and fixed: the words Congress wrote, the orders your governments actually issued between March 2020 and September 2021, and what the United States itself told two federal courts when it had to argue the same questions before a judge. Find the sentence that appears in your letter. Each page tells you what the sentence claims, what the public record shows, and what the Government has said about the point when a court was listening.
The fourteen grounds
The Service has decided suspension-prong claims on fourteen recurring grounds. Each is answered in this section from the statute's text, from Tri-State, from the instruments in the Library and from the United States' own representations to two federal courts. Not one of the fourteen survives that comparison. Twelve rest on words the statute does not contain, on a document the United States has represented "lacks the force of law," or on both; one, the gross-receipts ground, confuses two independent prongs that the United States itself told the Tri-State court are independent; and one, the ordinary meaning of "order," is correct and, applied to the instruments, decides the question in the employer's favor. The fourteen are taken in the Service's own order and vocabulary.1
The terms used
Throughout this section the "Service" is the Internal Revenue Service; the "United States" is the Government as a litigant in the two cases described below; the "Notice" is Notice 2021-20, 2021-11 I.R.B. 922 (Mar. 15, 2021), released March 1, 2021; the "Suspension Clause" is the operative statutory text, section 2301(c)(2)(A)(ii)(I) of the CARES Act and section 3134(c)(2)(A)(ii)(I) of the Internal Revenue Code, which asks whether the operation of the trade or business "is fully or partially suspended during the calendar quarter due to orders from an appropriate governmental authority limiting commerce, travel, or group meetings (for commercial, social, religious, or other purposes) due to the coronavirus disease 2019 (COVID-19)"; and the "Library" is this site's Orders Library, in which every instrument cited in this section is held under the exhibit number shown beside it.
The two cases
The United States' representations come from two proceedings. The first is Stenson Tamaddon, LLC v. IRS, No. 2:24-cv-01123-SPL (D. Ariz.), a suit by an ERC advisory firm challenging the Notice, now on appeal as No. 25-4217 (9th Cir.). In that case the United States filed its opposition and cross-motion for summary judgment on January 6, 2025 (ECF No. 44, cited in this section as "Doc. 44"); the District Court entered its summary-judgment order on June 20, 2025 (ECF No. 49, "Doc. 49"); the transcript of the July 16, 2024 preliminary-injunction hearing is cited as "Tr."; the appellant's opening brief of September 17, 2025 is "Opening Br."; and the United States' answering brief of January 30, 2026 is "Br. for Appellees." The second is Tri-State Memorial Hospital v. United States, No. 2:25-cv-0181-TOR (E.D. Wash.), a hospital's refund suit in which the court ruled on the United States' motion to dismiss on May 28, 2026 and construed the Suspension Clause (ECF No. 38, cited as "Tri-State"). The United States' words in both cases are collected, pinned to the page, on the page The IRS in Its Own Words.
One representation anchors the analysis of every ground that rests on the Notice rather than on the statute:
But Notice 2021-20 is merely guidance issued so that the public can have the benefit of knowing how the IRS is interpreting the relevant ERC statutory provisions. The Notice ... lacks the force of law. The Notice itself does not require [the plaintiff] or its clients to do anything or prevent them from doing anything.
Doc. 44 at 19
The District Court accepted the representation: "the Notice carries no force of law and is entitled to no deference." Doc. 49 at 27. A ground that adds a word to the statute on the Notice's authority therefore adds it on the authority of a document whose author has told a federal court that it binds no one.
How each ground is read
Each page in this section follows the same order. The Service's sentence is quoted verbatim, in the form its letters, Forms 886-A and memoranda use. The Suspension Clause is read against it. The instruments in the Library that the sentence would have to be true about are named by issuer, number and date, with the exhibit beside each. Where the United States has addressed the point in either case, its words are quoted with the page. Where a court has ruled on the point, the holding is quoted with the page. Each page closes with the answer stated plainly. The analysis addresses positions, letters and briefs, never the people who wrote them.
The fourteen sentences
Each sentence below is quoted as the Service's letters, Forms 886-A and memoranda state it. Open a ground to read what the sentence claims, what the statute says, what the Library holds and what the United States has said about the same point in court.
- 1
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.
Letter 105C, form language on the suspension prong, letters issued since 2024
Ground 1: No government orders in effect →
- 2
The employer operated an essential business and remained open.
As stated in the Service's letters, Forms 886-A and memoranda
Ground 2: Essential business and remained open →
- 3
Stay-at-home orders directed to the public are not considered; only orders directed at business operations count.
As stated in the Service's letters, Forms 886-A and memoranda
Ground 3: Stay-at-home orders directed to the public are not considered →
- 4
The employer could have continued comparable operations through telework.
As stated in the Service's letters, Forms 886-A and memoranda
Ground 4: Comparable operations through telework →
- 5
The orders affected the employer's customers, not the employer (Q&A-13).
As stated in the Service's letters, Forms 886-A and memoranda
Ground 5: The orders affected the customers, not the employer →
- 6
The employer's measures were voluntary (Q&A-14).
As stated in the Service's letters, Forms 886-A and memoranda
Ground 6: The measures were voluntary →
- 7
The portion of the business affected was not more than nominal (the 10 percent figure applied as a floor).
As stated in the Service's letters, Forms 886-A and memoranda
Ground 7: Not more than nominal; the 10 percent floor →
- 8
The required modifications (masks, gloves, spacing, screening) had only a nominal effect on operations (Q&A-18).
Form language of the Service's letters and Forms 886-A on the suspension prong
Ground 8: Modifications with "only a nominal effect" →
- 9
A declaration of emergency is not an order (Q&A-10).
Form language of the Service's letters and Forms 886-A on the suspension prong
Ground 9: A declaration of emergency is not an order →
- 10
The supplier was not itself closed by order; supply-chain effects are too attenuated (AM 2023-005).
Form language of the Service's letters and Forms 886-A on the suspension prong
Ground 10: The supplier "not itself closed"; supply-chain effects "too attenuated" →
- 11
The orders had lifted before the quarter began; any effect was a lingering effect.
Form language of the Service's letters and Forms 886-A on the suspension prong
Ground 11: Orders that "had lifted before the quarter began" →
- 12
The employer did not experience the required decline in gross receipts.
Form language of the Service's letters and Forms 886-A
Ground 12: The required decline in gross receipts →
- 13
The instruments relied on are guidance, recommendations or best practices, not orders.
Form language of the Service's letters and Forms 886-A on the suspension prong
Ground 13: Guidance, recommendations or best practices, not orders →
- 14
'Order' must be given its ordinary meaning.
Form language of the Service's letters and Forms 886-A on the suspension prong
Ground 14: 'Order' must be given its ordinary meaning →
In plain terms: the Service decides suspension-prong claims on fourteen recurring sentences. Each is answered on this site from the statute's text, from the Tri-State decision, from the instruments in the Library and from what the United States has told two federal courts. Not one of the fourteen survives that comparison. Twelve rest on words the statute does not contain, on a Notice the United States has described as lacking the force of law, or on memoranda that say they "may not be used or cited as precedent." One confuses two independent ways to qualify that the United States itself called independent. One, that "order" means what it ordinarily means, is correct, and applied to the instruments it decides the question for the employer. Behind all fourteen stands one sentence, that no orders were in effect, which the public record contradicts for every quarter.
The fourteen together
The Service has decided suspension-prong claims on fourteen recurring grounds. Each is answered on this site from the text of the Suspension Clause, from Tri-State Memorial Hospital v. United States, from the instruments in the Library and from the United States' own representations to two federal courts. Not one of the fourteen survives that comparison. Twelve rest on words the statute does not contain, on a document the United States has represented "lacks the force of law," or on both; one, the gross-receipts ground, confuses two independent prongs that the United States itself told the Tri-State court are independent; and one, the ordinary meaning of "order," is correct and, applied to the instruments, decides the question for the employer those instruments reached.1
"But Notice 2021-20 is merely guidance issued so that the public can have the benefit of knowing how the IRS is interpreting the relevant ERC statutory provisions. The Notice ... lacks the force of law. The Notice itself does not require [the plaintiff] or its clients to do anything or prevent them from doing anything."
Doc. 44 at 19
| Ground | The sentence | What it rests on | The answer |
|---|
| 1 | "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." | A statement about the public record. | Orders were in force in every quarter; for the third quarter of 2021 the sentence describes a quarter that did not occur. Ground 1 |
| 2 | "The employer operated an essential business and remained open." | "Essential," a word taken from Q&A-11 of the Notice. | The word is not in the statute; the designation was the premise of the conditions the orders imposed, and the United States reads Q&A-11 to make such an employer eligible where a portion of its operations was suspended by order. Ground 2 |
| 3 | "Stay-at-home orders directed to the public are not considered; only orders directed at business operations count." | "Directed at business operations," from Q&A-10 and Q&A-13 of the Notice and Doc. 44 at 30. | The statute says nothing of the order's addressee; the United States told the District Court that orders "directed at business operations (operational hours, space, etc.) would also be considered." Ground 3 |
| 4 | "The employer could have continued comparable operations through telework." | "Comparable operations," from Q&A-15 and Q&A-16 of the Notice. | Neither word is in the statute; an order that closed a workplace suspended the operation at the workplace, and the remainder continuing is what "partial" means. Ground 4 |
| 5 | "The orders affected the employer's customers, not the employer (Q&A-13)." | "Customers," from Q&A-13 of the Notice. | "Due to" is but-for causation; an order that confined the customers limited the employer's commerce. Ground 5 |
| 6 | "The employer's measures were voluntary (Q&A-14)." | "Voluntary," from Q&A-14 of the Notice. | The orders and the standing duties compelled the measures; Tri-State observed that on the theory that COVID-19 rather than the orders caused the changes "there are not many businesses or any business that would be eligible under the ERC at all." Ground 6 |
| 7 | "The portion of the business affected was not more than nominal (the 10 percent figure applied as a floor)." | "Nominal" and "10 percent," from Q&A-11 of the Notice. | The United States has told two courts that the figure "isn't an eligibility requirement" and is "a safe harbor rather than a hard floor." Ground 7 |
| 8 | "The required modifications (masks, gloves, spacing, screening) had only a nominal effect on operations (Q&A-18)." | "Nominal effect," from Q&A-17 and Q&A-18 of the Notice. | The sentence was written about masks and aisles; the orders fixed capacity, hours, patient volume, testing and admission. Ground 8 |
| 9 | "A declaration of emergency is not an order (Q&A-10)." | Q&A-10 of the Notice, which itself lists a shelter-in-place proclamation as an order. | A proclamation that commands is an order whatever its caption. Ground 9 |
| 10 | "The supplier was not itself closed by order; supply-chain effects are too attenuated (AM 2023-005)." | "Attenuated," from AM 2023-005, which "may not be used or cited as precedent." | "Due to" is but-for causation; the United States told the Ninth Circuit that the supplier rule "never even mentions" a closure order against the supplier. Ground 10 |
| 11 | "The orders had lifted before the quarter began; any effect was a lingering effect." | "Lifted," from AM 2023-005 at 7. | Orders were in force on every day of the third quarter of 2021, and "suspended" includes a delay. Ground 11 |
| 12 | "The employer did not experience the required decline in gross receipts." | Reading the statute's "or" as "and." | The prongs are alternatives; the United States said "Or, second" in the District Court and called the gross-receipts test "another method to qualify" in Tri-State. Ground 12 |
| 13 | "The instruments relied on are guidance, recommendations or best practices, not orders." | A characterization of the instruments. | The Library records each instrument's operative clause and enforcement provision; the documents that describe themselves as not legal authority are the Service's own. Ground 13 |
| 14 | "'Order' must be given its ordinary meaning." | The ordinary meaning of "order." Correct. | Every instrument in the Library is an authoritative direction with legal force; the ground, taken at its word, decides the question for the employer. Ground 14 |
The sources for each row are collected in the note.2
What remains
Twelve of the fourteen grounds rest on words the statute does not contain ("essential," "directed at business operations," "comparable operations," "customers," "voluntary," "nominal," "10 percent," "nominal effect," "attenuated," "lifted," "significant"), on a document the United States has represented "lacks the force of law" and the District Court has held "carries no force of law and is entitled to no deference," or on memoranda that "may not be used or cited as precedent." The gross-receipts ground reads "or" as "and" against what the Tri-State court called the United States' own "admission." The ordinary-meaning ground is correct and, applied, is the employer's case. Behind all fourteen stands the Letter 105C sentence, a statement about the public record that the public record contradicts for every quarter and, for the third quarter of 2021, describes a quarter that did not occur.3
The Service is free to disagree about the weight of these instruments. It is not free to say they did not exist.
Find the sentence your letter uses in the table above and open its page. Each page quotes the sentence, states what the statute actually says, sets the United States' own words beside the letter's, and names the instruments in the Library that answer it. The letter decoder does the matching for you; the record builder assembles the orders in force for your State, your metropolitan area, your industry and the quarters you claimed.