Statement from Linda L. Lacy

To House Ways and Means Committee, Subcommittee on Oversight

Washington, D.C.

After struggling with the words that might make my testimonial a
significant statement in favor of reforming the AMT, I keep returning to
the reality of the personal toll that the AMT has taken on my son . . .
and so, I offer the following intimate account:

Approximately three weeks ago, I managed to arrange a signature loan and
three credit card loans totaling \$50,000, walked into our local IRS
office and proceeded to hand the clerk a personal check approximating
95% of the \"debt\" my son \"created\" by exercising a portion of the
stock options given him by a dot.com firm he was working for in
California in 2000. After watching him struggle the past three years
trying to figure out a way to support his wife and children and still
pay the IRS for a phantom gain on those remaining stock options, I
decided to utilize MY borrowing power and deliver him from the specter
that is the IRS. I could ill-afford to do this for him, yet I must
confess that I did it partially for selfish reasons . . . I was tired of
the fear that kept me awake at night wondering if the \"new, friendlier
IRS\" would put a lien on his bank account or encumber his employer by
laying claim to his wages in order to satisfy the most insidious IRS tax
regulation that exists.

What a ridiculously complicated system of taxation we live under! This
young man has been sentenced to years of trying to climb out from under
oppressive and illegitimate taxation debt. I\'m appalled by what is
being allowed to obscure the dreams of so many.

Now, somehow, my son must come-up with enough money every month to keep
the loans out of default. However, after considering the power the IRS
wields, we determined it was better to owe almost anyone but the IRS (in
fact, the official IRS WEB site encourages that \"it would be more
advantageous to take out a bank loan than subject oneself to the
penalties and interest assessed by the IRS\" . . . very helpful
information). We have no reason to believe that retiring this huge debt
will happen quickly . . . quite the contrary. As I am nearing retirement
and need to direct my financial life toward that phase, I am placed in a
rather precarious position . . . one of helping my son or helping myself
(what would most parents do????).

My children were raised with a respect for the United States government
and all it represents. I led them on several occasions through the
buildings and monuments of Washington D.C. and extolled the virtues of
living in such a privileged country. My husband and I managed to provide
all three of our children with college educations and will gladly and
appreciatively spend the rest of our lives repaying the loans that
provided them with the excellent learning experiences they received.
But, at least there are solid educations in exchange for those loans! My
son received two engineering degrees in four years at Duke University
and we were certain that the culmination of his hard work would be
financial reward compensatory to the effort he expended. That reward
must now take a back-seat to the IRS to satisfy this caustic injustice.

Please give all of us a break . . . reform this tortuous tax and
designate it retroactive to the 2000 Tax Year when so very many
ambitious, spirited, and intelligent young people were caught completely
off-guard and are now paying dearly for their naiveté (some in amounts
reaching hundreds of thousands of dollars). In addition to those already
mired in this mess, so many of us in the middle class without
accountants and lawyers to warn us of impending danger are indeed poised
to be ensnarled also.

To close, I must add that those affected by the AMT extend beyond those
whose social security numbers appear on the IRS debt ledgers . . . Thank
you for reading a mother\'s testimonial.

> Linda L. Lacy
>
> Mogadore, Ohio