[steven2012]

It's not just that.

During the dotcom boom, many, many people faced tremendous tax liabilities because of ill-timed tax strategies. For example, they had stock options that were worth millions, but instead of selling them, they exercised them in order to hold them to get long term capital gains. So for example, they had options worth $10M, and they exercised them. They faced an immediate tax liability for $10M, but then the dotcom bust hit, and they lost all $10M, leaving them with $10M in taxes but nothing to pay it back with. I personally knew several coworkers that suffered this.

I believe it was only recently, over 10 years after the fact, that the IRS changed how they treated this so that people didn't go bankrupt from this.