Nortel hit with $3 billion tax bill

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TORONTO (Reuters) -- Bankrupt Canadian telecom equipment maker Nortel Networks Corp. owes the United States Internal Revenue Service a staggering $3 billion in taxes and interest, according to a claim filed in the company's bankruptcy case.

The IRS claim, filed earlier this month, lists $2.97 billion in unsecured priority claims, along with $49.3 million in unsecured general claims.

"We have significant tax loss carry-forwards in the U.S., the size of which have been subject to review by the IRS. However, we are not aware of anything that would lead to a tax liability of that magnitude," Toronto-based Nortel said in a statement.

The claim, which relates to the period between 1998 and 2008, lists taxes due of $1.80 billion and interest due of $1.16 billion. In February, the IRS separately filed claims amounting to $15 million against Nortel.

A spokesman for the IRS was not immediately available for comment.

Nortel, once the largest North American telecommunications equipment manufacturer, filed for bankruptcy protection in January, blaming the economic crisis for derailing a turnaround effort that began in 2005.

Tax claims are often filed against bankrupt companies, but these are usually reviewed and negotiated between both parties.

"The fact of the matter is the debtor will study the claim and determine whether or not to object to the claim ... Sometimes this ends up in a litigation of sorts," said Scott Stuart of Donlin Recano & Co, which acts as a claims agent in U.S. Chapter 11 bankruptcy cases.