The Election, the Democrats’ Tax Proposals, and Year-End Tax Planning: Caught Between Scylla and Charybdis
October 05, 2020
What a Week
There is no denying that last week’s political events were historic; one can only hope they were aberrational.
The week began with the Sunday New York Times publishing a story in which it claimed to have obtained copies of Mr. Trump’s tax returns for several years, but not including 2018 and 2019.[i] According to the article, these returns portray a taxpayer who has regularly generated impressive revenues, but who has also regularly racked up equally impressive losses, as a consequence of which he has paid little to no Federal income tax for many years.[ii]
On Monday, in the midst of ongoing, but unproductive, discussions with the Administration over new economic stimulus measures, the Democratic leadership in the House introduced a scaled-down version of The Heroes Act,[iii] which was first submitted for consideration in May, and invited the Republicans to reconsider their position against the bill.
On Tuesday, we witnessed the two septuagenarian candidates[iv] for the U.S. Presidency square off in the first of what was to be three scheduled debates.[v] We all know how well that went. Let’s just say that neither “gentleman” discussed tax policy.
After the announcements by several blue-chip companies, on Wednesday and Thursday, that they were cutting tens of thousands of jobs, the Labor Department on Friday reported that permanent job losses had increased for the second consecutive month, to 3.8 million.
On Thursday, after further discussions with the Administration failed to generate a bipartisan measure – with the Republicans arguing that, even as revised, The Heroes Act was still too expensive – House Democrats passed their economic stimulus package[vi] as their Republican colleagues accused them of political gamesmanship.[vii]
Then came the announcement Friday that Mr. Trump had tested positive for COVID-19 – only one month before the general election – and that he would be hospitalized for several days, which will necessarily limit his campaign activities. The seriousness of his situation[viii] – when viewed against the backdrop of troubling economic news plus a resurgence of the virus in parts of the country[ix] – has led some political observers to wonder whether these circumstances will create a sense of urgency that may bring the two parties together long enough to pass a stimulus bill that both recognize is long overdue.[x]
In the meantime, as Mr. Biden continues his campaign, Mr. Pence and the Republican Party[xi] are probably doing what they can with the palpable absence[xii] of their candidate.
Our country has seen its share of political upsets; take the 2016 presidential election, for example, in which Mr. Trump defeated Ms. Clinton, notwithstanding the latter’s political bona fides, and despite her having “won” the popular vote.
According to the latest NYT/Siena College Poll, Mr. Biden maintains a lead in the largest so-called “battleground states:” Pennsylvania and Florida.[xiii] Indeed, most national polls show Mr. Biden ahead in most battleground states.[xiv] Of course, many voters learned in 2016 that leading in the polls does not guarantee victory for a candidate.[xv]
In light of Mr. Trump’s condition, however, and with the election only 29 days away, what is the likelihood, realistically, of Mr. Trump’s erasing Mr. Biden’s lead and overtaking him?
The White House, however, is not the only prize in this election. In fact, a Democratic administration, even with the backing of a friendly House, will not be able to dictate, let alone implement, a change in tax policy. In order for Mr. Biden to have any chance of fundamentally changing how businesses and their owners are taxed, the Democrats will also have to reclaim the Senate.[xvi]
It just so happens that the Democrats actually have a decent chance of taking control of the Senate,[xvii] while also retaining their majority in the House.[xviii]
Under these circumstances, what should the owner of a closely held business be considering in terms of year-end tax planning, and at what point should such planning be put into effect? We’ll address these in reverse order.
When to Act?
Ideally, the planning should have begun months ago; in fact, many business owners have already determined how they will respond in the event of a Democratic victory. The implementation of these measures, however, should await the results of the election.[xix]
Trump Wins or the Senate Remains Republican
If Mr. Trump somehow remains in the White House, a Democratic sweep of Congress will represent a somewhat hollow victory unless the Party wins enough seats to override a presidential veto, which requires a two-thirds vote in each chamber.[xx]
Because no one is predicting a veto-proof Democratic majority in this November’s elections, the changes in the tax law enacted at the end of 2017[xxi] should be relatively safe through the end of 2022. However, the Congressional elections in November 2022 may very well yield such a majority, at which point the Democrats may be able to enact significant changes to the Code.
If the Republicans somehow maintain a majority in the Senate (say, 51 to 49), Mr. Biden will not be able to enact any tax increases through legislation[xxii] during his first two years in office, unless there are defections from the Republican side. Of course, even if they fail to secure the Senate this year, the November 2022 Senate races may give the Democrats a majority in both chambers of Congress.[xxiii]
Of course, many of the TCJA provisions that the Democrats are targeting are already set to expire at the end of 2025, which would be the final year of Mr. Trump’s second term.[xxiv] That being said, in the case of a Trump or Republican-Senate victory, a business owner will not have to take any action before the end of 2020 in order to take advantage of the existing tax laws, though they would have to keep their eyes on the 2022 races, and they certainly would not want to forget the end-of-2025 expiration date.
Biden Wins and Democrats Take the Senate
Call it a sweep, a trifecta, or whatever else you please, with the presidency and both houses of Congress under their control, the Democrats will be free to enact changes to the Code[xxv] during their first year in power with retroactive effect to January 1, 2021.
The Federal courts, including the U.S. Supreme Court, have held that the retroactive application of an income tax statute to the entire calendar year in which the statute was enacted does not per se violate the Due Process clause of the Fifth Amendment.[xxvi]
Start Planning for a Sweep Now (?)
The business owner will have only 58 days after the general election, and until the year-end, to implement any tax plans they may have decided upon after discussions with their advisers. Of course, that assumes the business owner has, in fact, had those discussions.
As indicated earlier, the election is 29 days away; that’s 4 weeks from tomorrow. For those business owners who have not yet considered whether or how they should plan for changes in the income, gift, estate and employment tax rules, along the lines described by Mr. Biden during the campaign, now is the time.
What to Consider
Let’s begin with a summary of Mr. Biden’s proposed changes to the Code:
- Increase the maximum federal tax rate on ordinary income from 37% to 39.6%.
- In the case of individuals with gross income for the taxable year in excess of $1 million, increase the federal tax rate for long-term capital gains (including with respect to carried interests) and for qualified dividends[xxvii] from 20% to the ordinary income rate of 39.6%.[xxviii]
- Phase out the 20% qualified business income deduction[xxix] for taxpayers making at least $400,000 per year.
- Limit the benefit of itemized deductions for higher income taxpayers.[xxx]
- Impose the 12.4% Social Security tax – which is borne equally by the employer and the employee – on all wages in excess of $400,000.[xxxi]
- Limit the use of like kind exchanges of real property[xxxii] to investors with annual incomes of not more than $400,000.
- Eliminate the step-up in basis for assets acquired from a decedent.[xxxiii]
- Reduce the so-called “basic exclusion amount” under the federal estate and gift tax, as well as the exemption amount under the generation-skipping transfer tax (“GSTT”), from $10 million to $5 million.[xxxiv]
- Increase the federal income tax rate on C corporations from 21% to 28%.
- Increase the effective rate on Global Intangible Low Tax Income (“GILTI”; basically, unrepatriated overseas income) from 10.5% to 21%.[xxxv]
- Eliminate the ability to carry back net operating losses (“NOLs”) generated in 2018, 2019 and 2020, and eliminate the suspension of the “80%-of-taxable-income” limit for utilizing NOLs in 2018 through 2020.[xxxvi]
What else might we reasonably expect from Mr. Biden? A good place to look is the 2017 Green Book[xxxvii] prepared by the Obama administration, from which the Democrats seem to have already borrowed “liberally.”
Among the revenue raisers included in the Green Book that take aim at the wealthy – and which may eventually find their way into Mr. Biden’s tax agenda – are the following:
- Treat the gift or testamentary transfer of appreciated property as a taxable sale of the property in which the donor or decedent would realize a capital gain; the tax imposed on the gain deemed realized at death would be deductible on the decedent’s estate tax return;[xxxviii]
- Impose a new annual minimum tax, equal to 30% of AGI for the year, on married taxpayers with AGI of at least $2 million, with the tax being phased in beginning with taxpayers having AGI of at least $1 million;[xxxix]
- Require that a GRAT[xl] have a minimum term of ten years and a maximum term of the life expectancy of the annuitant plus ten years; require that the remainder interest in the GRAT at the time the interest is created have a minimum value equal to the greater of 25% of the value of the assets contributed to the GRAT or $500,000; prohibit the grantor from engaging in a tax-free exchange of any asset held in the trust;[xli]
- If the deemed owner of a grantor trust engages in a sale or exchange transaction with that trust that is disregarded for income tax purposes by reason of the grantor trust rules, the portion of the trust attributable to the property received by the trust in that transaction (including the appreciation thereon) would be subject to estate tax as part of the grantor’s gross estate, would be subject to gift tax at any time during the grantor’s life that their treatment as the deemed owner of the trust is terminated, and would be treated as a gift by the deemed owner to the extent any distribution is made to another person;[xlii]
- On the 90th anniversary of the creation of a trust, increase the trust’s inclusion ratio to one (1), thereby rendering no part of the trust exempt from GST tax.[xliii]
Of course, the progressive wing of the Democratic Party may have other ideas, but we won’t know what these are until the 117th Congress begins its work in January 2021.[xliv]
In addition to the foregoing, business owners need to recognize that legislation amending the Code is not the only way by which taxes may be increased – the IRS’s regulatory interpretation of various statutory provisions may have the same effect.
Moreover, whereas the Trump administration has sought to limit the IRS’s regulatory activity, a Biden administration would likely give the agency greater latitude, more encouragement and, maybe, sufficient funding.[xlv]
What to Do?
So, what should the owners of a closely held business be considering – and planning to do – over the next 87 days?[xlvi]
Planning to Sell Your Business in 2021?
Ask a business owner and their advisers whether they’d prefer to sell their business at the end of the current taxable year, or at the beginning of the next? All other things being equal, the owner would select the following year to close the sale in order to defer payment of the resulting tax liability.
However, with the prospect of an almost 100% increase in 2021 for the tax rate applicable to capital gains, the owner and their advisers may, instead, prefer to close the sale and receive payment[xlvii] at the end of the current year.
If, for some reason, some portion of the purchase price has to be paid in the succeeding year (2021), it may behoove the seller to consider electing out of installment reporting[xlviii] in order to secure the current, lower rate, provided the payment is not deferred very long,[xlix] and certainly not beyond the tax due date for the year of the sale (2020).
In addition, the seller may insist that the cash payable at closing be allocated to its capital gain assets so as to maximize the recognition of the gain attributable to such assets.[l] The gain associated with its “hot assets” (to borrow a partnership tax term) will be recognized in the year of sale regardless.[li]
Yes, these measures seem counterintuitive in that they accelerate the recognition of gain, but it may be sensible from an economic perspective in light of the proposed increase in the applicable tax rate – the taxpayer has to run the numbers.[lii]
Finally, given the proposal to phase out the deduction based on qualified business income, this may be the last year in which the seller of a more substantial business will be able to claim that deduction in respect of any gain realized on the sale of inventory, receivables or assets that are subject to depreciation recapture.
What about Real Property?
A business that has already decided to sell a real property, but that plans to defer recognition of the gain from the sale by acquiring replacement property as part of a deferred like kind exchange,[liii] may want to consider completing the sale this year – the first leg of the exchange – and closing out the exchange next year.
It is unlikely that any change in 2021 regarding the law applicable to Section 1031 exchanges would capture a sale that occurred in the taxable year (2020) preceding the year in which the change is enacted.
A closely held corporation with profits generated in one year will often make a distribution of such profits in the following year. There are times, however, when rather than making such a distribution, the corporation reinvests its profits in furtherance of the business. When the accumulated earnings and profits are later distributed to the shareholders, they may be taxable as dividends.
How may a corporation, with accumulated earnings and profits, but without sufficient liquidity, make a distribution to its shareholders before the year-end so as to ensure they enjoy the current, lower capital gains rate?
For one thing, the corporation may borrow the necessary funds. Alternatively, it may issue its own obligation to its shareholders. The amount of the distribution will be the fair market value of the obligation, which will depend, in part, upon the interest rate and security of the obligation; thus, the amount distributed may not be the same as the face amount of the obligation.
Paying Year-End Bonuses?
Many closely held businesses pay end-of-the-year bonuses to their key executives and top-performing employees. These amounts are often paid at the beginning of the succeeding year.
In light of Mr. Biden’s proposal to apply the Social Security tax[liv] to all wages in excess of $400,000, the employer-business may want to consider paying the 2020 bonus this year rather than the next.
Before making this decision, however, the cost attributable to the payment of the additional tax in the following year (2021) should be compared to any tax savings that may be realized by the business by virtue of paying the higher tax. For example, a C corporation employer facing the possibility of an increased corporate income tax rate in 2021 (as described above) should determine when it would realize the most benefit from the payment.
Estate Planning Anyone?
If a business owner is already planning to make gifts of equity in the business to, or for the benefit of, their family members,[lv] but has not yet decided when to pull the proverbial trigger, well, now may be the time.
The prospect of the accelerated[lvi] reduction by at least 50% of the Federal unified gift and estate tax basic exclusion amount, and of the GSTT exemption amount, should be incentive enough for any such business owner, who faces a taxable estate, to act before the end of the year.[lvii]
What’s more, this may be their final shot at leveraging their remaining exemption amount – while also taking advantage of the current low interest rate environment[lviii] – by transferring an equity interest in their business through a zeroed-out GRAT, a sale to a grantor trust, or a bargain sale to a family member who may be active in the business.
On top of that, the value of the business has probably already been depressed, given the state of the economy. With the reduced entity value as the starting point, the gift or estate tax value of a non-controlling, non-transferrable interest in the business may reasonably be reduced still further by considering the factors at which the previously withdrawn IRS regulations were targeted.[lix]
PPP Loan Forgiveness
Wait, you may say, the PPP? That’s not on Mr. Biden’s list of proposed tax changes.
That’s correct, but it is significant that when the Democrat-controlled House introduced the original version of the Heroes Act back in May, the bill included a provision which would allow a taxpayer to whom a PPP loan was made to claim a deduction for any business expenses[lx] paid using the PPP loan proceeds, notwithstanding that the loan may be forgiven.[lxi] The Republican-controlled Senate had introduced a similar provision as part of a much smaller bill.
The scaled-down version of the Heroes Act that passed the House last week contained that same provision,[lxii] notwithstanding the turbulence and inter-party friction of the intervening period.[lxiii]
This bodes well, I think, for its ultimate passage sometime this year.[lxiv] The resulting tax savings should provide businesses that participated in the PPP (and whose loans are discharged without tax consequences) with some much needed liquidity as they continue to fight through the political, social and economic uncertainty in which we now find ourselves.
That’s all for now folks.
[i] https://www.nytimes.com/interactive/2020/09/27/us/donald-trump-taxes.html .
[ii] Among other things, the article also pointed out that Mr. Trump appeared to have claimed deductions for items that the article described as personal expenses.
In response, Mr. Biden, predictably, released his own returns to demonstrate how much more he has paid in taxes that his opponent.
[iii] It is substantively the same legislation, but the programs it seeks to create would cover a shorter period of time. https://appropriations.house.gov/news/press-releases/house-democrats-release-updated-version-of-the-heroes-act .
[iv] Mr. Trump, who turned 74 in June, and Mr. Biden, who will be 78 in November.
[v] The remaining presidential “debates” are currently scheduled for October 15 and October 22. The single vice presidential debate is still scheduled for October 7.
[vi] https://appropriations.house.gov/news/press-releases/house-passes-updated-heroes-act .
[vii] Surprisingly, a number of centrist Democrats were also not pleased with this tactic.
Meanwhile, in the north wing of the Capitol, Senator McConnell announced that he was dedicating this upcoming week to seating Federal judges.
One day later, after a third Senator (Ron Johnson) tested positive for COVID-19, McConnell announced that the Senate would not be meeting this week. Notwithstanding the change of plans, “The Senate’s floor schedule will not interrupt the thorough, fair and historically supported confirmation process previously laid out,” McConnell, said in a statement, adding that the Judiciary Committee had “successfully” met with senators appearing both in person and virtually since May.
In other words, Judge Barrett will have her turn at bat beginning October 12. https://www.nytimes.com/live/2020/10/03/us/trump-vs-biden .
[viii] The 74-year old President of the United States is in the hospital with an illness that has already killed over 200,000 Americans.
[ix] Not to mention the continuing relaxation of social distancing measures by governors in other parts of the country.
[x] https://thehill.com/homenews/house/519431-trumps-illness-sparks-new-urgency-for-covid-deal .
[xi] The RNC Chair also tested positive for COVID-19. https://www.thedailybeast.com/republican-national-committee-chairwoman-ronna-mcdaniel-tested-positive-for-coronavirus-on-wednesday .
[xii] Other than some videos and a drive around the hospital.
[xiii] https://www.nytimes.com/live/2020/presidential-polls-trump-biden .
[xiv] Texas is an exception. https://www.bbc.com/news/election-us-2020-53657174 .
[xv] Welcome to the Electoral College. See Article II, Section 1 of the Constitution, and the Twelfth Amendment.
But see the Supreme Court’s July 2020 unanimous decision in Chiafalo v. Washington and in Colorado Department of State v. Baca, where the Court basically held that a state may require an elector to support the winner of the popular vote in the state. Justice Kagan wrote for the Court. Justice Thomas wrote a concurring opinion based on the Tenth Amendment. https://www.brookings.edu/blog/fixgov/2020/07/14/supreme-courts-faithless-electors-decision-validates-case-for-the-national-popular-vote-interstate-compact/ .
[xvi] https://www.taxlawforchb.com/2020/08/bidens-tax-proposals-for-capital-gain-like-kind-exchanges-basis-step-up-the-estate-tax-tough-times-ahead/ ; https://www.taxlawforchb.com/2020/08/responding-to-the-democratic-partys-tax-plans/.
[xvii] https://fivethirtyeight.com/features/democrats-are-slight-favorites-to-take-back-the-senate/ . Assuming they take the White House, the Democrats will need a net gain of three seats in the Senate to win control of that chamber.
[xviii] Even if they control both houses of Congress, the Democrats will have to deal with the Senate’s cloture (or anti-filibuster) rule, which requires 60 votes to end debate on a matter – including a tax matter – and putting it to a vote, at which point only a majority will be required for passage. (There is no such rule in the House.) See Article I, Section 5, Clause 2 of the Constitution, which authorizes each chamber of Congress “to determine the rules of its proceedings.”
That being said, query whether the Democrats will be able to invoke the 1974 Congressional Budget Act’s “reconciliation” rule to circumvent the cloture rule, limit debate, and put a tax matter to a vote requiring only a majority? https://www.brookings.edu/policy2020/votervital/what-is-the-senate-filibuster-and-what-would-it-take-to-eliminate-it/. The Act allows reconciliation to be used for legislation that addresses revenues and spending, as well as the federal debt limit.
[xix] Here I go beating the dead horse again, but I can’t shake the memory of late 2012. For those of you who do not recall what happened, Federal tax increases were scheduled to go into effect on January 1, 2013 as a result of the expiration of the so-called Bush tax cuts. The only way this could be avoided was if President Obama and a lame-duck Congress could reach an alternative agreement. One of the taxpayer-friendly provisions scheduled to expire was the then-increased Federal estate and gift tax exemption amount of $5.12 million. Believing that the President and Congress would not reach a deal, many taxpayers made gifts at the end of 2012 in amounts sufficient to exhaust their exemption. Of course, a deal was reached on January 2, 2013 with retroactive effect (the “American Taxpayer Relief Act of 2012”), and the larger exemption amount was preserved. On January 3, clients started calling about reversing or rescinding their 2012 gifts. Many did not understand the meaning of “irrevocable.”
[xx] Article I, Section 7 of the Constitution.
[xxi] The Tax Cuts and Jobs Act; P.L. 115-97.
[xxii] Business owners need to recognize, however, that the passage of legislation by both chambers of Congress is not the only way by which taxes may be increased.
For example, after several failed attempts by the Clinton and Obama administrations at legislating restrictions on the use of valuation discounts for purposes of determining a taxpayer’s gift tax or estate tax liability arising from their lifetime or testamentary transfer of an interest in a closely held business to a member of the taxpayer’s family, the IRS proposed regulations that sought to limit the use of such discounts. See https://www.taxlawforchb.com/2016/09/the-irs-takes-the-offensive-on-valuation-discounts-part-one/ .
Although the proposed regulations were withdrawn in 2017 (after having been described as “unworkable” by the current administration), they may just as easily be reintroduced by the IRS at the direction of a Biden administration.
[xxiii] The 34 Class 3 Senators will be up for re-election in November 2022. See Article I, Section 3, Clause 2 of the Constitution.
[xxiv] The following are among the TCJA provisions set to expire at the end of 2025: These provisions include the reduced individual income tax rates, the increased exemption amount and phase-out threshold of the individual AMT, the increase in standard deduction of individuals, the suspension of miscellaneous itemized deduction, the suspension of limitation on itemized deductions, the suspension of deduction for personal exemptions, the limitation on deduction for qualified residence interest, suspension of deduction for home equity interest, the limitation on deduction for State, local, etc., taxes, the increase in percentage limitation on cash contributions to public charities, the limitation on excess business losses of non-corporate taxpayers, the qualified business income deduction, and the increase in estate and gift tax exemption.
Among those set to expire at the end of 2026: the additional first-year depreciation with respect to qualified property, and the election to invest capital gains in an opportunity zone.
[xxv] Again, I am assuming that they will be able to circumvent the Senate’s cloture rule.
[xxvi] See, e.g., U.S. v. Darusmont, 449 U.S. 292 (1981). The Court stated that the retroactive imposition of a tax amendment may be so harsh and oppressive as to deny due process. In the case before it, the taxpayer had argued that they did not have notice of the change. The Court responded that the taxpayer could not claim surprise, since the proposed increase in the tax rate at issue had been under public discussion for almost a year before its enactment. Moreover, it stated, the amendments to the tax did not create a “new tax.”
[xxvii] IRC Sec. 1(h).
[xxviii] Remember to also consider the application of the 3.8% surtax on net investment income under IRC Sec. 1411.
[xxix] IRC Sec. 199A.
[xxx] IRC Sec. 63.
[xxxi] Don’t forget to add the 2.9% Medicare tax. IRC Sec. 3101, Sec. 3111, and Sec. 3121.
[xxxii] IRC Sec. 1031.
[xxxiii] IRC Sec. 1014.
[xxxiv] IRC Sec. 2010.
It’s also possible that the estate tax and gift tax exemptions may be reduced to their 2009 levels of $3.5 million and $1 million, respectively, coupled with a tax rate of 45%. President Obama’s 2017 Green Book took this position, and the progressive wing of the party may press the moderates for such an aggressive reduction in the exemption.
[xxxv] IRC Sec. 951A and Sec. 250.
[xxxvi] This reverses a provision of the CARES Act, P.L. 116-136, which temporarily suspended changes made by the TCJA.
[xxxvii] The 2017 Fiscal Year Revenue Proposals.
[xxxviii] Addresses the basis step-up at death. Mr. Biden has tossed this one around a bit.
[xxxix] Remember the “Buffet Tax?”
[xl] Grantor retained annuity trust, under IRC Sec. 2702.
[xli] Good-bye zeroed-out GRATs.
[xlii] No more sales to IDGTs.
[xliii] Wither the dynasty trust?
[xliv] Query whether the “progressives” will demand the application of more “punitive” measures in exchange for their cooperation.
[xlv] It’s not unreasonable to expect the IRS to try to burnish its image after reports over the last few years that it audits very few wealthy taxpayers. See, e.g., https://www.businessinsider.com/wealthy-who-dont-pay-taxes-rarely-pursued-by-irs-2020-6 .
[xlvi] The sum of 29 days to the election, plus 58 days to the year’s end.
No jokes about expatriating – not even to New Jersey.
[xlvii] Whether in cash, in kind, or in the form of the buyer’s taking subject to or assuming the seller’s debt.
[xlviii] IRC Sec. 453(d).
[xlix] To reduce the credit risk. Extreme example, close December 30 (just in case) for cash plus note, the note is satisfied January 2 – reduces credit risk.
[l] Section 1231 assets and capital assets defined in Section 1221.
[li] See, e.g., IRC Sec. 453(b) and Sec. 453(i).
[lii] https://www.taxlawforchb.com/2020/08/responding-to-the-democratic-partys-tax-plans/ .
[liii] Reg. Sec. 1.1031(k)-1.
[liv] 6.2% payable by the employer, and 6.2% payable by the employee (and collected by the employer).
[lv] Always an important factor – are the assets “disposable” from the donor’s perspective?
[lvi] Before 2026.
[lvii] If a taxpayer utilizes the higher exemption amount now, the IRS has indicated that it will not “claw back” the gift in the event the exemption amount is subsequently reduced.
[lix] See above.
[lx] IRC Sec. 162.
[lxi] In Notice 2020-32, the IRS indicated that no such deduction would be allowed under these circumstances.
[lxii] Section 203 of the Heroes Act.
[lxiii] The deduction was not held back as a bargaining chip.
[lxiv] Yes, I believe the Lame Duck Congress will come through with a stimulus package.