U.S. Treasury Releases Paycheck Protection Program Loan Application, Additional Information

On March 31, 2020, the U.S. Treasury Department released the initial loan application for borrowers under the “Paycheck Protection Program,” a Small Business Administration (SBA) forgivable loan program that is part of the CARES Act passed by Congress last week.  In addition, the Treasury Department provided borrowers with an “Information Sheet” for borrowers under the program.

Here are some notable highlights from these releases:

  • On the loan application, the borrower and each 20{45ef85514356201a9665f05d22c09675e96dde607afc20c57d108fe109b047b6} or greater owner of the borrower must make certain certifications, including that “[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations” of the borrower, and the loan will be used “to retain workers and maintain payroll or make mortgage payments, lease payments, and utility payments.”
  • With respect to the future applications to potentially forgive the loan, the application states that “[d]ue to likely high subscription, it is anticipated that not more than twenty-five percent (25{45ef85514356201a9665f05d22c09675e96dde607afc20c57d108fe109b047b6}) of the forgiven amount may be for non-payroll costs.”
  • The Information Sheet states that borrowers can begin applying for the Paycheck Protection Loans on April 3, 2020 and includes a link to help borrowers locate a local SBA lender.

A link to the loan application can be found HERE.

A link to the Information Sheet can be found HERE.

Michael D. Walker is a business, tax and estate planning attorney who has worked with individuals and small to medium-sized businesses for nearly 30 years. A careful listener, Michael skillfully guides his clients to meet the wide variety of legal challenges they face in our current complex world.

Letter to the Editor: BOLD Action for Alzheimer’s

SYK attorney, and commissioner on senior services, Victoria Blachly is an outspoken advocate for the Oregon Alzheimer’s Association, and the people whose lives have been touched by Alzheimer’s.

Today Victoria’s letter to the editor was published, with a call to action for Congress to protect those effected by Alzheimer’s.

“Today, there are more than 5 million Americans living with Alzheimer’s and more than 15 million serving as unpaid caregivers. Too often Alzheimer’s is treated as an aging issue, ignoring the public health consequences of a disease that someone in the United States develops every 66 seconds… Alzheimer’s is the most expensive disease in America at an estimated cost of $259 billion annually. And with Medicare and Medicaid covering two-thirds of its annual costs, Alzheimer’s demands more attention from our government.”

Victoria raises her voice for those suffering from Alzheimer’s. She is asking Congress to pass the Building Our Largest Dementia (BOLD) Infrastructure for Alzheimer’s Act. And she is asking for Sens. Ron Wyden and Jeff Merkley and Rep. Greg Walden to fight for the millions of Americans affected by Alzheimer’s.

To learn more about BOLD and about the effect Alzheimer’s has on millions of Americans, visit www.alz.org.

Victoria Blachly is a partner at SYK, and an experienced fiduciary litigator that works with many elderly clients, cases or causes, she is also a proud Board Member for the Oregon Alzheimer’s Association Chapter.


What if Congress Does Nothing?

The clock is ticking! If Congress fails to act by the end of 2010, many significant tax provisions passed as part of the Economic Growth and Tax Relief Reconciliation Act of 2001 (often informally referred to as “EGTRRA”) will simply expire. This “sunset” feature of EGRRRA was enacted so that the law would comply with the Byrd Rule, a rule that allows Senators to block a piece of legislation if it purports to significantly increase the federal deficit beyond a ten-year term. Now the ten-year clock has almost wound down. 

Here’s a summary of the significant changes to the tax code that will occur if Congress does not act:

 Tax Rates. Currently, the top tax rate is 35%. The following table is comparison of this year’s tax brackets with an estimate of the 2011 post-EGTRRA tax rates, including a reinstated 39.6% tax rate: 



Tax Bracket

Married Filing Jointly

Tax Bracket

Married Filing Jointly

10% Bracket

$0 – $16,750


15% Bracket

$16,750 – $68,000

15% Bracket

$0 – $70,040

25% Bracket

$68,000 – $137,300

28% Bracket

$70,040 – $141,419

28% Bracket

$137,300 – $209,250

31% Bracket

$141,419 – $215,528

33% Bracket

$209,250 – $373,650

36% Bracket

$215,528 – $384,860

35% Bracket

Over $373,650

39.6% Bracket

Over $384,860

Capital Gains. If you are currently in the 25% or higher tax bracket, your maximum rate on capital gains is 15%. If you are in the 10% or 15% brackets, the maximum rate is 0%! After EGTRRA sunsets, the top capital gains rate increases to 20% (up to 10% for those below the 25% bracket).  

Qualified Dividends. Similar to capital gains, most corporate dividends are currently taxed at a 15% rate. These dividends are known as “qualified dividends.” After 2010, these dividends will be taxed in the same manner as ordinary income, up to the top 39.6% rate.

Phase-out of Itemized Deductions & Personal Exemptions. Prior to the Bush-era tax cuts, itemized deductions (including charitable donations, home mortgage interest, state and local income taxes, and property taxes) were reduced for higher-income individuals under a phase-out rule. Since 2006, this phase-out rule has, itself, been phased out so that by this year, itemized deductions were no longer subject to any limitations. However, in 2011, the phase out rule returns. Specifically, itemized deductions will be reduced by 3% of AGI in excess of the applicable phase-out threshold (approximately $170,000). The maximum reduction is limited to 80% of the affected deduction amounts. Similarly, certain EGTRRA limitations on the personal exemption phase-out rules will expire after 2010, thus further increasing the effective tax burden for high earners.

Estate Tax. At the time of EGTRRA’s enactment, the federal estate tax exemption amount was $675,000 and was scheduled to increase incrementally to $1,000,000 by 2006. EGTRRA increased the exemption amount to $1,000,000 in 2002, $1,500,000 in 2004, $2,000,000 in 2006, and $3,500,000 in 2009. In 2010, the estate tax (as well as the generation-skipping tax) is repealed. Between 2001 and 2009, the top estate tax rate dropped from 55% to 45%. If Congress does nothing prior to year’s end, the estate tax will be reinstated with a $1,000.000 exemption amount and a top rate of 55%.

Many are optimistic that Congress will act this year to make at least some changes to the tax code, particularly for those individuals with adjusted gross incomes of less than $250,000 and estates worth less than $3,500,000. However, in the wake of this year’s cantankerous debates in Congress over health care legislation as well as the election of Senator Scott Brown in Massachusetts (effectively sapping the Democrats filibuster-proof majority in the Senate), it may be difficult for Congress to find common ground over major tax legislation. The best bet for this may be changes in a “lame-duck” session following the fall elections. Stay tuned!


On December 16, 2009, the Wall Street Journal reported that the Democrats’ attempt to extend the Federal Estate Tax exemption of $3.5 million into 2010 has been blocked by the Republicans. Senator Max Baucus is quoted as saying, “We clearly will work to do this retroactively, so that when the law is changed, it will have retroactive application.” 

The Republicans believe that the repeal should be allowed to take effect as provided under current law, and Senator John Kyl (R, Arizona) stated, “The problem doesn’t have to exist. They’ll just leave the existing law alone and let the rate go to zero, where everyone wants it anyway.”

 Thus, as the law stands today, Federal Estate Tax will be

  • zero in 2010;
  • with certain exceptions the tax basis step-up will be repealed for 2010;
  • The estate tax exemption will return to $1,000,000 in 2011.

It is an interesting and continuing revelation about the extent of the massive gridlock in the current Congress when the Democrats could not even muster enough votes to pass a mere extension of the $3.5 million exemption for the first three months of 2010.


It remains to be seen whether or not enough votes can be mustered to make any estate tax changes in 2010. If the Senate could not pass an estate tax bill with a 60 vote majority, I am skeptical that it will get accomplished in 2010. 

Redeal of the Repeal?

In the August 7, 2009, BNA Daily Tax Report, it was noted that Rep. Brady has proposed a permanent repeal of the estate tax.  Do you remember that old Saturday morning cartoon, I’m Just a Bill?  Well, this bill is going to continue to sit on Capitol Hill and will never become law.  You heard it here first.

So, what is to become of the repeal of the estate tax?  Most of those in the know seem to say that we are going to stay with the current $3.5 million exemption.  They are probably right.  However, I think it is dangerous to count on that happening.  Let me spell out for you a less probable, but possible scenario.

 Under current law, in 2010, the estate tax essentially goes away.  Then, in 2011, it comes back with a vengeance, at a $1 million exemption (thank you Senator Bird).  When this process was set up eight years ago, it was thought that there was no way a tax increase would be allowed, so the repeal would go on, regardless of the Bird Rule.  However, now we are in an economic crisis, and the government needs money. 

Many believe that the congressional leadership don’t want to see 2010 with the unlimited exemption, so we can expect finality this year.  It is possible, however, that the they will just punt this year.  With health care taking up the entire agenda lately, the congressional leadership could just extend the $3.5 million exemption for one year while they consider the matter.  They would likely get broad suppport for this extension.  Then, next year, they could decide that Bush’s plan was best after all, and just let the Bird Rule apply.  We would be back at a $1 million exemption without a vote for a tax increase.

You may be thinking the congressional leadership wouldn’t risk this because it affects too many of the voters, but keep two things in mind.  First, because of the recession, less people would be affected as less people will have taxable estates.  And second, the government needs money to finance the change America voted for.

Now, I agree this is not the most probable scenario.  But, it is at least possible, and because it is at least possible, we should consider it in our estate tax planning.