National Taxpayer Advocate Nina E. Olson’s list of objectives — detailed in the first of her two annual required reports to Congress — zeroes in on the problems that she intends to focus on during the fiscal year ahead.At least one of the objectives — which focuses on the liabilities of incentive stock options under the Alternative Minimum Tax — has a good chance of being resolved, according to Tim Carlson, president of the Coalition for Tax Fairness and pro bono attorney for a number of victims of the anomaly. “Pending legislation will fix it, and it has support from both sides of the aisle,” he said.
Under regular rules, incentive stock options are not taxable at the time that the option is granted or when the option is exercised. However, the spread between the option price and the fair market value of the stock upon the exercise of the ISO is income under the AMT.
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