The final sorry chapter of the great Internet bubble of the late 1990s may be written later this month-on April 15 to be exact. That's when the big bill for exercising stock options on once high-flying tech stocks comes due.

Some advisors in tech meccas such as Silicon Valley, Seattle and northern Virginia have been scrambling to help formerly wealthy technology workers "disqualify" portions of their exercised stock options to avoid huge tax hits.

In many cases, it's too late to offer any help at all.

"People will get killed," says Greg Sullivan, principal at Sullivan Bruyette Speros & Blayney in McLean, Va. One of his partners, Eleanor Blayney, says many young workers are getting hard hit by the Alternative Minimum Tax (AMT) because they decided to exercise incentive stock options-but not sell the stock they bought.

The reason for doing that is if the stock is held for at least a year after exercising the options or two years from when the options were granted, the owner pays capital gains rather than ordinary income taxes when he or she does sell. However, if the stock wasn't sold, the owner is subjected to the AMT in the year the options were exercised.

The AMT, in many cases, is causing tax bills to balloon, at the same time that the value of stock holdings is sinking. "They are now, this April, conceivably looking at a tax liability that is several times greater than the shares that they hold," she says. "For some people, they technically could be facing bankruptcy."

She cited one example involving Micro Strategy, whose share price has gone from more than $300 in early 2000 to a current price of about $20. Workers who exercised options at the stock's peak probably couldn't pay their taxes now, even after selling all their holdings, she says.

Theoretically, taxpayers who are subject to the AMT are allowed tax credits to use in subsequent years. Even these credits, however, sometimes won't be enough to make up for the taxes people will pay in 2001. "There are some people who will not live long enough to recover the upfront taxes they've paid in AMT," Blayney says.

Sitting at the cusp of California's Silicon Valley, Barbara Steinmetz started sounding the alarm for her clients in July. "I had a ton of people come in here," said Steinmetz, president of Steinmetz Financial Planning in Burlingame, Calif.

Steinmetz uses as an example a single employee with an annual income of about $100,000 and the typical assortment of mortgage deductions, dividend income and interest income. Without any stock options, this person would be paying $19,582 in federal income taxes for 2000. But take this same person and factor in the exercising of stock options representing a $70,000 gain for the employee. With the AMT kicking in, that would raise this person's federal tax bill to $34,565-regardless of the value of the stock after the options were exercised, Steinmetz says.