Lehman, IRS agree to settle $198.67 million of tax refund disputes

By Caroline Salls

Pittsburgh, March 23 - Lehman Brothers Holdings, Inc. requested court approval of a tax refund dispute settlement with the Internal Revenue Service, according to a Tuesday filing with the U.S. Bankruptcy Court for the Southern District of New York.

The company said it claimed a refund from the IRS for taxes, penalties and deficiency interest it paid related to eight disputed tax issues reported on its 1997 through 2000 consolidated income tax returns, seven of which are also disputed in tax years from 2001 through 2008.

In connection with these eight issues, Lehman said it has previously paid $374.09 million in disputed taxes and penalties and $227.49 million in deficiency interest.

Of the $374.09 million refund for taxes and penalties claimed by Lehman, the company said $198.67 million is covered under the settlement.

Under the settlement, Lehman will recover $125.67 million, or 63%, of that $198.67 million total.

A hearing is scheduled for April 14.

New York-based Lehman Brothers Holdings was the fourth-largest investment bank in the United States. The company filed for bankruptcy on Sept. 15, 2008. Its Chapter 11 case number is 08-13555.

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