Is that "In 1987 I showed a ($5,608,000)" the loss only from 1987 or is that also including some of the prior year NOL amounts?
In 2007 any amount from prior to 1987 would be canceled.
For example, if it was say 1,500,000 from 1987 year and the rest (4,108,000) from prior years only the 1,500,000 might still be available (to the extent that it was not used from 1998-2006) to carry into 2007.
Unfortunately, it will not be possible for me to give a definite answer in this forum as to what was and was not still available in a given year since that would require me to know (and better yet to see) all of the returns for the intervening years. For example, to know if any of the 1987 loss was still available in 2007 it will depend on how much was used in the years from 1991 through 2006.
Some of that 1987 loss probably was used to offset income in later years (which I am basing on the fact that you said the NOLs were "through 1990".)
But, based on the rules it does seem possible or perhaps even likely that there was still NOL to be applied to 2007 from the 1987 year.
If you did have 5,600,000 NOL in 1987 year and 6,200,000 NOL in 1988 year then you would have had to have income of more than about 14,500,000 net income in the other years from 1989-2006 to use all of that NOL.
On the other hand if there was only 600,000 additional NOL in 1988 that is being added to the total of all NOL amounts carrying forward (5,600,000 in 1987) then it we would have to look at how much was from 1987 alone.
For some to remain in 2007 the total net income from 1987-2006 will have to be more than the total of the NOLs that were incurred, not the carry forward total, from 1987-2006.
That is a but of a rough approximation but if you can look at all of the years from 1987-2006 and take the annual total income that may give you an idea if the denial is reasonable.
As some point it may be worthwhile to engage an experienced practitioner to review the years from 1987-2006 to confirm your suspicion that the denial is not proper and to be able to apply the general rules to your specific situation.
Please do continue to ask if you need more help on the general rules of applying the NOLs and the cancellation after twenty years of the unused balance.