Comment on FR Doc # E8-28894

Dear Sir or Madam, I'm writing regarding the treatment of discounted stock options as non-qualified deferred compensation under section 409A. My company (Xilinx) gave me 1200 options to buy Xilinx shares at $17.37 on Oct 15, 2002. Just recently they realized (or informed me) that the actual board meeting when the options were granted was on Oct 22, 2002, when the price was $18. Now, they are applying Section 409A rules to these discounted options (which I have not exercised) and are calculating some phantom income based on their value on Dec 31 on each year that these shares vested, for a total of $3452. I’m required to pay income taxes and penalties (20% to fed and state!) over this amount, which of course I never received. I fully understand the need to pay taxes over actual income, but that’s clearly not the case here. I would like to remind you of your mission statement: apply the tax law with integrity and fairness to all. Also, I was orally referred by the IRS to Publication 525 page 12 and 13, which treats discounted stock options quite differently. This publication clearly states that discounted stock options are only taxed upon exercising the options. Last but not least: why only count the income on those options as deferred compensation and not the losses? Clearly this income is uncertain and should qualify as deferred compensation under the rules of section 409A. I'd appreciate clarification on the need to pay income taxes and penalties for this never received income. I'd also appreciate a ruling prior to the April 15 tax filing deadline. Thanks and best regards, J.L. de Jong