Nortel contests IRS $3Billion claim

Nortel's law firm entered a motion into the court records to contest the huge claim made by the IRS for $3billion in back taxes interest and penalties dating back nearly a decade.

Docket number 1495 on the EpiqSystems website (See right hand panel) lists a series of reasons as to why Nortel considers this claim outrageous and requests that the IRS provide a lot more back up information than simply listing the numbers.

Given the performance of Nortel financially over the last 10 years it's hard to imagine that they would owe such a large sum to the IRS, especially since they have gone through so many audits and reviews to straighten out their finances.

The IRS has come back with a counter request to have the situation reviewed in a separate court case. I don't think the judge has agreed to that and is unlikely to do so. This is obviously going to drag on for some time, and Nortel has asked for a specific date to be set for the IRS to come up with substantive evidence as to their claim.