Exercising an ISO is treated as income solely for the purpose of calculating the alternative minimum tax (AMT), but is ignored for the purpose of calculating the regular federal income tax. The spread between the fair market value of the stock and the option's strike price is included as income for AMT purposes. This inclusion of the ISO spread in AMT income is triggered only if you continue to hold the stock at the end of the same year in which you exercised the option.

If the stock is sold within the same year as exercise, then the spread does not need to be included in your AMT income.

I'm not sure whether they're saying the spread is $33,000 or the FMV is $33,000 and since you paid $10,500 the spread is $22,500

check with your company.  as to the value of the stock, ask them how they came up with the value.