Subject: My tax rate was 496% in 1999 due to AMT Comment: I am writing to beg you to change the tax code so that stories such as mine never happen again. When eToys was started in 1997, its founders quickly realized that it would be difficult to know their market if everyone that worked for them was a childless, young male. So it wasn't surprising that they hired me as their 5th employee, a mid-thirties suburban mother with experience in marketing and website design. I initially worked part-time, as I wanted to spend time with my young children. When the company was low on cash, they offered to give me part of my compensation in stock options. I didn't know anything about stock options, but accepted, knowing that whatever happened, I was there primarily because I really enjoyed my job. The company went public in May, 1999, but because of a lockout period and a blackout period, we weren't able to sell any of our stock until February, 2000. In the meantime, I exercised as many shares as I could, sometimes when the stock was trading as high as $68. I had also become a full-time employee, because the company decided it didn't want part-timers anymore. Unfortunately, by February, 2000 I needed to sell my stock just to pay my tax bill. Even though my income for 1999 had been $85,500, I had to pay an Alternative Minimum Tax of $424,100 because I was taxed as if I'd had income as high as the price the stock was selling for each day I exercised my options. Thankfully, the company's stock hadn't been de-listed yet, so I was able to sell my shares to pay my tax bill. I've been trying to get AMT overpayment back from the IRS, so far to no avail. I implore you to do what you can to reform our nation's tax code so that this doesn't happen to anyone else, and so that I can recover the overpayments that have become a lifetime interest free loan to the government. I know that ReformAMT and the Coalition for Tax Fairness are working hard to support targeted ISO AMT legislation to bring immediate relief to ISO AMT victims, many of whom will be financially irretrievably destroyed if relief is not provided in the next few months. Taxation without income is wrong. Thankfully, so is taxation without representation, and I'm relying upon you and my Congressional representative the Honorable David Dreier along with Senators Feinstein and Boxer to do the right thing. |