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Coalition for Tax Fairness and ReformAMT Praise Congress for Passing Comprehensive Relief Legislation for Families Struggling with ISO AMT Taxes Imposed on Phantom Income

WASHINGTON-(Business Wire)-October 3, 2008 - The Coalition for Tax Fairness (CTF), an organization working to address the Incentive Stock Option Alternative Minimum Tax (ISO AMT) crisis, and ReformAMT, a grassroots tax reform organization dedicated to resolving the ISO AMT crisis, applaud Congress for passing legislation that fairly and comprehensively provides relief for tens of thousands of workers suffering for eight years from unintended, severely disproportional AMT tax burdens. The legislation restores the incentives Congress put in place for starting and growing new businesses, and returns to employees and their families AMT tax on income never received.

ISO AMT victims – employees of small and large companies across America – were forced to pay taxes up to and exceeding 300 percent of their annual salaries because of an unintended flaw in the tax code that imposed AMT on phantom “income” never received by the employees. In many cases, families were unable to pay – leading the IRS to seize their houses and savings and garnish their wages. The legislation just passed by the House and Senate provides relief to these families by accelerating the refund of taxes paid on the phantom income and by stopping further IRS efforts to collect those taxes. The legislation thus resolves the eight-year ISO AMT crisis.

The ISO AMT relief legislation was enacted as part of the Economic Recovery Act of 2008. It is based on the AMT Credit Fairness and Relief Act, H.R. 3861, that was sponsored in the House by Congressman Chris Van Hollen (D-MD) along with lead Republican cosponsor Congressman Sam Johnson (R-TX), other original cosponsors Congressmen Richard Neal (D-MA) and Jim Ramstad (R-MN), and twenty-three other cosponsors. The identical Senate counterpart, S.2389, was sponsored by Senator John Kerry (D-MA) along with original cosponsors Senators Maria Cantwell (D-WA) and Joseph Lieberman (I-CT), lead Republican cosponsor Senator Charles Grassley (R-IA), and three other cosponsors, Senators Barbara Boxer (D-CA), Richard Durbin (D-IL), and Ted Kennedy (D-MA).

“I lost my house and life savings to the unintended consequences of the ISO AMT rules,” said Angela Hartley, a single mother from San Diego, California. “Now I will have the chance to start over, save for retirement and stop looking over my shoulder to see if the IRS is coming. You have no idea the weight that has been lifted after eight long years – my son does not remember a time when his mother was not worrying about this enormous debt.”

David Gottesfeld, a lab technician at EMC Corp. in Hopkinton, Massachusetts, states, “Since 2002 I've had a debt that was twice the amount of all my combined assets including my house value, savings and 401K. Needless to say, my family completely lost all our savings and 401K plus we faced an IRS lien on our home. At times the IRS garnished my salary causing extreme hardship. We were forced to take a home equity loan that went to pay the ISO AMT debt. Thankfully, Congress heard our cry for help, and my Senators worked with other legislators and battled to fix this for my family and others. Now, with this long-awaited relief my family and I can slowly regain our life.”

“I can’t begin to describe strain this has put on our family during the last eight years,” said June Speltz of Ely, Iowa. “It’s just so sad that this has been hanging over our heads during the nearly our whole life as a young family. Our children were only 2, 4 and 7 when this began. They’ve seen way too many tears shed. It’s just been horrible to live in fear that all we’ve worked so hard for was being taken from us when all we’ve ever wanted was to do the right thing. It is a tremendous relief to know we can now move on to live the life we’ve worked so hard for and provide for the future of our children. I’m overcome with joy and we are extremely grateful!”

“The Coalition for Tax Fairness commends Congress for passing this legislation that will once and for all resolve a crisis that has devastated families for eight years. Families who have been barely hanging on financially, due to hugely disproportional AMT tax burdens assessed on income they never received, now will be able to begin rebuilding their lives,” stated Tim Carlson, President of the Coalition for Tax Fairness. “We are especially grateful to Representatives Van Hollen and Johnson for their leadership in the House, and to Senators Kerry and Grassley for their leadership in the Senate, in bringing this relief to the American workers.

“The Coalition also expresses deep gratitude for the support of House Ways and Means Chairman Charles Rangel (D-NY) and Ranking Republican Member Jim McCrery (R-LA), House Speaker Nancy Pelosi (D-CA), and Republican leader John Boehner (R-OH), Senate Finance Committee Chairman Max Baucus (D-MT), and Senate Majority Leader Senator Harry Reid (D-NV) and Republican leader Mitch McConnell (R-KY). The Coalition urges the President to quickly sign this legislation into law and restore fair and equitable tax treatment to tens of thousands of American families.”

“ReformAMT applauds Congress for passing this fair and comprehensive tax relief legislation that benefits American workers and businesses,” said Jay Cena, Co-Founder of ReformAMT. “Taxpayers have been living for years with unfair tax burdens – many have had to declare bankruptcy and have lost their homes and savings – and this legislation will halt further financial devastation and allow them to rebuild their lives. Entrepreneurs are vital to our economy’s health and job creation, and this ISO correction fixes a tax provision that was harming employees and undermining the very behavior Congress intended to encourage.”

About the Coalition for Tax Fairness

The Coalition for Tax Fairness (CTF) is a non-partisan, non-profit organization that is supporting a legislative initiative to fix the current Incentive Stock Option Alternative Minimum Tax (ISO AMT) crisis. CTF was formed to address the growing ISO AMT tax crisis, which is causing extreme financial hardship for tens of thousands of hardworking American families. CTF is working together with individuals and organizations such as ReformAMT, through education, legislative initiatives, and grassroots efforts to help reform the ISO AMT tax law and alleviate this catastrophic situation. For more information, visit www.fair-iso.org.

About ReformAMT

ReformAMT is a non-partisan, grass roots organization focused on a legislative remedy to correct a flaw in the Alternative Minimum Tax’s (AMT) antiquated treatment of Incentive Stock Options (ISOs). This widespread issue has financially devastated taxpayers who, under the current law, must pay taxes on phantom income they have never received. Founded in 2001, ReformAMT has grown to include thousands of members in 48 states & 306 Congressional districts. ReformAMT has been at the forefront of educating corporations, tax professionals, trade associations and lawmakers about the AMT’s negative impact on taxpayers who exercise incentive stock options. For more information, please visit www.reformamt.org.

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