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Nortel, IRS to Face Off At Trial Over $3B Tax Bill

Nortel Networks Corp. heads to trial on Oct. 13 to face off against the IRS, which has levied a $3 billion tax bill against the bankrupt telecom equipment maker.

Nortel continues to maintain it doesn’t owe the IRS a dime. Today, the company’s attorney said IRS officials weren’t acting in good faith when they slapped the company with the bill in August, and that the agency just wants to get some leverage on Nortel. That’s according to reports from Bloomberg, which sat in on the court discussions.

The IRS’ timing meant Nortel had to rewrite part of its $915 million sale contract with Avaya Inc., which won the enterprise unit at auction earlier this month.

The IRS lawyer told U.S. Bankruptcy Judge Kevin Gross the claim is indeed legit and that Oct. 13 is too soon to go to trial.

Gross didn’t budge, Bloomberg reported.

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