IRS Filing Claims That Drexel Owes $5 Billion in Taxes, Fines

The Internal Revenue Service said Wednesday that it filed bankruptcy court claims for $5.28 billion against Drexel Burnham Lambert Inc. for allegedly unpaid taxes plus penalties and interest.

The claims seek unpaid income, excise and employment taxes for 1980 through 1990 from the collapsed Wall Street firm, which sought bankruptcy court refuge a year ago Wednesday. Drexel said the claims are exaggerated.

The IRS made the filing late Tuesday in U.S. Bankruptcy Court in Manhattan.

Robert E. Mirsberger, Manhattan district director of the IRS, said bankruptcy court claims by the federal agency generally receive priority status.

Drexel said in a statement that some of the IRS claims may have merit, because of the size of the firm’s reserves and assets and because some open audit items exist.

“However, we continue to be dismayed by government agencies piling on without regard to the interests of legitimate constituents, including institutional creditors and former employee shareholders,” the statement said.

“Drexel’s board will vigorously defend against any efforts to unfairly usurp its assets, and we expect the ultimate resolution to be far different than these exaggerated claims,” it said.