Subject: How ISO-AMT places me on the brink of bankruptcy Comment: Dear Esteemed Panel Members, won't you please help? Statement from Sunil Ganu To House Ways and Means Committee, Subcommittee on Oversight Washington, D.C. June 2004 My life is changed because of the alternative minimum tax (AMT). I am suffering from acute panic disorder and stress. If my age is X, I look like X+10 years, thanks to this AMT. Moreover, people think I was either greedy or stupid. I never did anything wrong in my life to have all this trouble. My credit scores are 758+. I always paid my credit card balances and loan amounts on time. I followed the advice of my advisors at Morgan Stanley. They advised me not to sell the stock I purchased through the exercise of incentive stock options (ISOs) earlier – but there is no point in blaming anybody now. It's my mistake and it seems nobody can save me now. I have already paid more than $150,000 in AMT from the tangible assets I had and owe substantially more. My AMT credits will exceed $400K, which I will only be able to claim at a rate of $3000 per year for rest of my life or 133 years. I exercised (bought) 15,000 ISO shares I couldn't sell most of them before the company (Exodus Communications) filed for chapter 11, as I hadn’t owned the shares for at least one year. Initially I paid $110K in AMT by selling some of the stocks at $15.00 per share in 2001, remember now, I was taxed as if I sold them for $76 a share! I didn't realize that my company would be bankrupt soon. I still owe $150K plus penalties. The IRS has kept all my refunds – worth about $45K in the last 3 years – but penalties keep accruing. I have tried to negotiate with the IRS but we are rejected on every offer I made. My first OIC was turned down in 2002. I have appealed to the IRS again and increased the amount of my OIC. That too was turned down in April 2003. The IRS evaluation process is faulty. They are looking for all the money available in my 401(k) plan apart from whatever assets assessments are done based upon my car, credit cards statements etc. Though I don't have any bank balances, the IRS already put a lien on my Condo and basically I will be in a debt trap if I borrow from my credit card to pay off IRS as the interest rates are so high. The important point is that the IRS is seeking all this money for income I never realized. What a nightmare! Meanwhile I got laid off in August 2003. Luckily I got a job in another company with a lower salary in 3 months. \The trauma I went through during that time is unimaginable. Please do what is necessary to reform the draconian provisions of the law. Morally I don't believe I owe anything to the IRS but then legally and financially I have a sword hanging over my head. \ Sunil Ganu CA 15th Congressional District |