The Tax Extenders Bill was signed by the President on Wednesday, December 20, 2006!!!
The signing ceremony was a by-invitation only event for which our lobbyist managed to get Ron and June Speltz an invite.
This significant milestone is a giant leap toward our ultimate goal of getting relief for everyone. We are extremely proud of this result and feel gratified that it helps hundreds of thousands recover over two billion dollars in stranded AMT credits. As wonderful as this is; some taxpayers, including several of the founders of ReformAMT and CTF, will not see relief at this time.
There is still work to be done. Phase 2 of the effort will address the two biggest limitations of the bill :
We are also considering a Phase 3 of the effort that will make run at relief in some state tax agencies.
- No wording on how to address outstanding liabilities, penalties, and interest
- Phase-outs of eligible taxpayers based on Adjusted Gross Income (AGI)
Here is a general, high-level summary of what the bills does:
Although we are knowledgeable, THIS IS NOT TO BE CONSTRUED IN ANY WAY AS TAX ADVISE. PLEASE SEEK PROFESSIONAL GUIDANCE AS SOON AS POSSIBLE. YOU MAY NEED TO DO SOME YEAR-END PLANNING.
- People who have exercised ISO's, have met the 3 year waiting period, and have an outstanding AMT carry forward credit, can recoup 20% of the credit each year starting from tax year 2007 through tax year 2012, after which the program expires (sunsets). Eligibility for the refund is not affected by if you are in AMT or not.
- Going forward, corporations will be required to report exercises of incentive stock options to the Service.
- There has been much confusion about whether the refund is 20% each year of the starting credit amount or 20% each year of the existing outstanding credit.
- The JCT Staff (those that translate legislative language and write intent into implementation - Blue Book for the service) and our Champion's office, Sam Johnson, are all clear that the goal is for everyone to receive their entire credit back in 5 years.
- If there is a mis-intepretation of intent, we will move for a legislative Technical Correction in 2007 ahead of the start of the program, so count on getting 100% of your refund if you meet all the other criteria.
Remember, selling of ANY assets, including equities, retirement funds, real estate, having a family member leave you assets as part of their will or estate, selling and making a profit off an asset sale (home), can raise your AGI above the phase-out thresholds.
For example, if you want a full refund over the next 5 years, depending on your income level you may not be able to sell anything during that time that would trigger substantial capital gain!
While we STRONGLY urge you to seek the advice of a tax or financial professional directly, here are some VERY GOOD articles that may provide additional insight from Kaye Thomas for you and your professionals to reference.
Next Steps - CALL TO ACTION!
Despite the bill's current limitations, we are all thrilled with this initial success. This victory provides us much credibility and momentum with our leaders in Washington, DC. With this first major milestone behind us, our goal is to carry the fight forward and strike while the iron is hot.
With that in mind, NOW OUR BIGGEST OBSTACLE IS FUNDING! Over the last 6 years, we have accumulated over $1,000,000 in lobbying debt. Our lobby partners have been very gracious and patient. Much of the time they have supported our efforts at greatly reduced rates. To date, our professional partners in this mission have often postponed collection of their well deserved fees because they know we are all dealing with extreme financial hardship.
Those of us that have borne this financial weight have paid out of pocket with money that we can ill afford to front. In addition to hard dollar expense, your ReformAMT and CTF teams have collectively donated in personal time and effort at least the cash equivalent value as those hired to help. With all the sacrifice carried by a relative few to win this fight, the weight of this burden is tremendous.
WE NOW NEED TO PAY OUR BILLS. With many people able to partake in the over two-billion dollar in refunds, and many still hoping to benefit with the removal of the phase-outs; we feel it is extremely reasonable to ask for help to enable us to continue the fight. As a basis of contribution, we ask that you consider supporting the cause with a donation of 4% of your ISO AMT related refund return (or more if you are financially comfortable with doing so). These contributions will be directly applied to catching up on the outstanding debt, and will provide the necessary funding for the crucial final steps in aggressively pursuing action to fix the remaining issues quickly. If enough funds are raised, it may even be possible to move into a Phase 3 of the recovery effort; enabling us to being working with the local states for a similar relief and recovery plan.
The time to act is NOW! Please either :
Regardless of which option you choose, please email us at email@example.com with your decision or if you have any questions.
- Send a check (payable to "ReformAMT") to:
P.O. Box 915
Cupertino, CA 95015
- Wire the funds (send email to firstname.lastname@example.org for wiring instructions)
- If you are unable to contribute now, click here to make a pledge.
Thank you! With your support, WE WILL CONTINUE TO WIN! But we can't do it without you!