By JACQUELINE PALANK

WASHINGTON — The Internal Revenue Service announced plans to reduce its tax claim against the New York Racing Association to $15.2 million from $1.6 billion, but an attorney for the horse-racing association said negotiations continue over the disputed claim.

In an interview Monday, attorney Brian S. Rosen said "$15.2 million is a far cry from $1.6 billion," but "we reserve our right to object to that proof of claim. The parties are continuing to discuss the issues associated with it and hope to reach an agreement soon."

Back in November, NYRA said the IRS agreed to withdraw the $1.6 billion claim and to file a new claim that was $25 million or less. The two parties said in documents filed with the U.S. Bankruptcy Court in Manhattan this month that the IRS will file a new claim for $15.2 million, subject to further changes.

The IRS filed its claim amid an ongoing audit of NYRA for the years 2000 through 2005, pointing out 16 adjustments to NYRA’s tax returns. The new agreement resolves issues with all but two of the adjustments, which the IRS values at about $23 million and which NYRA disputes.

NYRA, which filed for Chapter 11 protection in November 2006, will try to resolve disputes with some of its major creditors as the clock ticks on its exclusive right to file a bankruptcy exit plan. NYRA has until Feb. 11 before other parties can offer competing plans for reorganizing the company and repaying its creditors.

NYRA said it plans to present the stipulation with the IRS to the bankruptcy court on Feb. 4. Ten days later, it will face off with the federal government’s private pension insurer, the Pension Benefit Guaranty Corp., at a hearing to work out disputes over at least $100 million in claims that the PBGC says it’s owed.

NYRA runs the three largest thoroughbred racing tracks in the state of New York – Aqueduct, Belmont Park and Saratoga.